Islamabad, Feb 3: Morgan Stanley Capital International (MSCI) is expected to expand Pakistan’s presence in its Frontier Markets (FM) Index by adding six more stocks from the Pakistan Stock Exchange (PSX) in its upcoming review. The changes, anticipated to be announced on February 11, 2025, are likely to take effect from March 3, 2025, potentially increasing foreign investor interest in the local stock market.
According to a market review by Arif Habib Limited, the additions are expected based on MSCI’s updated criteria from August 2024. Companies meeting the requirement of having a minimum ordinary share market capitalization of USD 168 million and a free float market capitalization of USD 69 million are eligible for inclusion. As per these benchmarks, six Pakistani stocks anticipated to be part of the MSCI FM Index are Cherat Cement Company Limited (CHCC), Attock Refinery Limited (ATRL), D.G. Khan Cement Company Limited (DGKC), The Searle Company Limited (SEARL), Pioneer Cement Limited (PIOC), and Air Link Communication Limited (AIRLINK).
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This development is seen as a significant boost for Pakistan’s stock market, as the total number of Pakistani companies in the MSCI FM Index is expected to rise from 21 to 27 following these adjustments. As a result, Pakistan’s weight in the index will likely increase from the current 4.4 percent to approximately 6.9 percent. The brokerage house does not anticipate any deletions in this review, which adds to the positive outlook for the country’s representation in global indices.
The expected inclusion of these stocks could lead to enhanced liquidity, increased trading volumes, and greater exposure to international institutional investors, further solidifying Pakistan’s standing in the global financial markets. Analysts believe that this move will attract more foreign portfolio investments (FPI) and provide a boost to market sentiment, reflecting confidence in Pakistan’s economic and corporate sector performance.
With Pakistan’s stock market showing resilience in recent months, these additions align with the broader trend of improving macroeconomic indicators, investor optimism, and corporate earnings growth. As the official MSCI review date approaches, market participants will be keenly watching the final decision and its impact on overall market dynamics.
