Islamabad, Nov 4: MSCI Expected to Include 4 Additional PSX Companies in Its Indices This November. With an effective date of November 26, 2024, MSCI plans to release its November 2024 Index review on November 06, 2024, adding four more PSX businesses to its indices.
Topline Securities stated in a study that, according to information posted on the MSCI website, the minimum threshold of free float and total market capitalization for the selection of frontier market companies was US$69 million and US$138 million, respectively, in the most recent review of August 2024.
As you can see from the accompanying table, MSCI has raised its threshold requirement by an average of 10% in each of the last two reviews. This criterion is typically adjusted every quarter, and any changes remain unknown until the results of that specific review are made public.
The threshold requirements for free float and full market capitalization have been raised by 10%, from US$69 million to US$76 million and US$152 million, respectively, according to Topline.
Review of Potential Additions in November 2024
According to the research, four stocks Fauji Cement (FCCL), Cherat Cement (CHCC), Fauji Fertilizer Bin Qasim (FFBL), and Kohat Cement (KOHC) are anticipated to be added in November 2024. As of October 31, 2024, these equities’ free float market capitalizations are US$ 101 million, US$ 106 million, US$ 107 million, and US$ 79 million.
Three of these are far beyond the expected US$77 million free float requirement. Two more businesses, Pioneer Cement (PIOC) with a free float of US$ 71.6 million and Fatima Fertilizer (FATIMA) with US$ 72.4 million, also have free floats above US$ 69 million (prior criterion). The inclusion of any of them cannot be ruled out if the report’s projected 10 percent does not improve the free float threshold requirement.
Removals in the Review of November 2024
Since TRG was kept in the previous review because to the buffer rule, its free float market capitalization has increased to $70.7 million. At US$63 million, Interloop’s (ILP) free float is likewise lower. According to the buffer rule, both stockpiles would be kept.
Pakistan’s weight will rise by 50–70 basis points
Following the probable addition of the aforementioned four scrips and a roughly 12-percent increase in the market capitalization of current members, Pakistan’s weight is anticipated to rise from its previous 4.4-4.6 percent to 5.0-5.2 percent.
Estimating inflow Theoretically, we anticipate gross inflows of US$ 25–30 million due to a weight increase of about 50–70 basis points and an assumed AUM size of $5 billion, which tracks the MSCI FM index. The way inflows materialize, however, may differ because the majority of border funds are active.
