Islamabad: Morgan Stanley Capital International (MSCI), a global leader in financial analytics and decision support, has announced the inclusion of three Pakistani companies in its Frontier Markets (FM) Index and four in its FM Small Cap Index as part of its May 2025 index review.
The announcement marks a significant step for Pakistan’s capital market visibility on the global stage.
According to the MSCI statement, Fauji Cement Company, DG Khan Cement Company, and Maple Leaf Cement have been added to the main MSCI Frontier Markets Index, increasing the number of Pakistani constituents in the index to 26 from the previous 23.
These changes will become effective at the close of trading on May 30, 2025.
Topline Securities, a brokerage firm, noted that these additions are estimated to represent around 26 basis points in index weight.
Based on an estimated $2–3 billion in global funds tracking the MSCI Frontier Markets Index, the expected inflows to these companies are projected at $5–8 million. The firm also stated that Pakistan’s total weight in the index is now approximately 6 to 6.5%.
The brokerage explained that the MSCI has maintained the minimum criteria for inclusion, with a free float market capitalization threshold of $78 million and a total market capitalization of $155 million.
Notably, some companies, such as Interloop, Searle Limited, and Abbott Laboratories, have been retained in the index under the buffer rule, despite currently not meeting the free float threshold.
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Meanwhile, four new Pakistani companies have been added to the MSCI Frontier Markets Small Cap Index, including Archroma Pakistan, At-Tahur, Engro Polymer & Chemicals, and Pakistan Reinsurance.
Simultaneously, DG Khan Cement has been moved from the Small Cap Index to the main Frontier Index, while AGP Pharma and Agritech Limited have been removed from the small cap category.
This reshuffling comes in the backdrop of Pakistan’s 2021 downgrade from MSCI’s Emerging Market classification back to Frontier Market status, a reversal that occurred just over four years after the initial upgrade.
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The latest index changes are being closely watched by investors and analysts as a gauge of Pakistan’s attractiveness and visibility among global frontier market investors.
