Morgan Stanley Capital International (MSCI), an investment research business and supplier of stock market indices, has withdrawn MCB Bank from the Frontier Markets (FM) Pakistan Index.
AHL study indicates that in its most recent Semi-Annual Review (SAIR), MSCI announced modifications to the components of its global indices that will take effect on November 30, 2022.
Two stocks, Lucky Cement (LUCK) and Oil & Gas Development Company (OGDC), remain in the MSCI FM Pakistan Index, while MCB has been moved to the MSCI FM Pakistan Small cap Index.
The weight of Pakistan in the MSCI FM Index is 0.66 percent.
According to the MSCI Market classification guideline for November 2022, frontier markets must have a total market capitalization of $883 million in addition to a free-float market capitalization of $73 million and an ATVR of 2.5 percent.
The MSCI also announced other modifications to the MSCI Small cap index, with the exception of the addition of MCB. Hub Power Company (HUBC), Engro Fertilizers Limited (EFERT), Systems Limited (SYS), Fauji Fertilizer Company (FFC), United Bank Limited (UBL), MCB, Millat Tractors Limited (MTL), The Resource Group (TRG), Mari Petroleum (MARI), Engro Fertilizers Limited (EFERT), Habib Bank Limited (HBL), Pakistan Oilfields Limited (POL), Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL (SEARL).
The evaluation is anticipated to be neutral for the market as a whole.
In November 2021, Pakistan was reclassified from Emerging Markets (EM) into the MSCI FM Index. In accordance with the classification system for EM, Pakistan had met the criterion for market accessibility; however, it no longer met the requirements for size and liquidity, resulting in a reclassification.
Initially, the MSCI reclassified three Pakistani equities to the main index, notably HBL, LUCK, and MCB. In May 2022, however, the MSCI deleted HBL from the main FM index and added OGDC.