Good News for Pakistan on the economic front
Shares
ISLAMABAD -A Good News for Pakistan has been reported on the economic front.
Pakistan has retained its May 2017’s upgraded status in Morgan Stanley Capital International (MSCI) Emerging Market Index as it successfully averted a likely downgrading to Frontier Market Index.
All three Pakistani large and mid-cap stocks i-e Oil and Gas Development Company Limited (OGDC), MCB Bank (MCB) and Habib Bank Limited (HBL) continued to remain part of the MSCI Global Standard Indexes, according to the Geneva-based firm’s May 2019 Semi-Annual Index Review results that were announced in early hours on Tuesday.
There were speculations in the market that Pakistan would have faced downgrading to Frontier Market Index, or MSCI may initiate consultation for the possible downgrade in the review, as the three stocks had fallen short of the set criteria of meeting minimum free-float market capitalisation and/or minimum total market capitalisation.
The continuous sale at the Pakistan Stock Exchange (PSX), especially in the three stocks, for quite a long time, has reduced their market capitalisation from the required one.
“Buffer Rule most likely saved the day for Pakistan whose weight in MSCI Emerging Market Index is now estimated at 0.03pc, down 7-8 basis points since its inclusion in June 2017,” Topline Securities CEO Muhammad Sohail said told a private media outlet.
Foreign investors having an estimated $1.5 trillion funds in hand track the MSCI Emerging Market indexes to decide whether to invest or divest in the constituencies listed at stock markets around the globe.
However, MSCI Inc – a leading provider of research-based indexes and analytics globally – has deleted three Pakistani stocks from MSCI Global Small Cap Index; Fauji Cement (FFC), Fauji Fertilizer Bin Qasim Limited (FBL) and International Steels (ISL).
The changes will take place at the close of May 28, 2019, it announced.
