SBD-3
ELITE MEMBER
- Joined
- Sep 19, 2008
- Messages
- 15,120
- Reaction score
- -9
- Country
- Location
I thought somebody would have shared this news but it doesn't look like so. So here goes
Pakistan is in the spotlight these days. Not only are the economic statistics showing an encouraging sign, developments on the external front appear to be moving in favour of Pakistan.
Mind you, MSCI Inc., a provider of investment decision support tools worldwide, has confirmed in a recently released press statement that Qatar and UAE will be omitted from MSCI Frontier Market Index, where the two countries will be reclassified in MSCI Emerging Market index corresponding with the May 2014 index review.
Since Pakistan is linked to MSCI Frontier Market Index, the verdict has brought with itself a new wave of excitement on the local bourse, where the market pundits anticipate the move to bode well for Pakistans equity market.
As a reminder, Qatar and UAE currently frame 34.6 percent of MSCI Frontier Market 100 Index, representing over 20 securities in this index, according to the data published by MSCI.
The reclassification and omission of the two countries from MSCI FM 100 index will result in lifting the weights of remaining countries in the index. While in order to limit country concentration risk, MSCI has proposed a few modifications in the existing methodology, including a stricter free float market capitalisation requirement of $240 million and restraining the cumulative weight of the two largest countries to 40 percent.
In this context, Pakistan, having a weight of 4.3 percent in FM 100 index is likely to go up to 6.8 percent under current methodology and up to 8.4 percent under the proposed methodology, according to MSCI.
At present, nine companies represent Pakistan in this index. These include OGDC, MCB, FFC, UBL, POL, ENGRO, NBP, PPL and HUBC. By virtue of the proposed stricter free-float market capitalisation requirement as mentioned above, Lucky Cement is likely to be one addition to the index, taking the total number of companies from Pakistan to ten.
Considering that the FM 100 index is regarded as the benchmark for tracking frontier market performance, increasing the weightage in the index and addition of companies means increased representation of Pakistani scrips in the frontier market. By the same token, investor confidence (both local and foreign) is likely to get a boost, resulting in increased participation and hence higher foreign flows. That augurs well for Pakistans financial system!
MSCI brings a new wave of excitement | Business Recorder
Pakistan is in the spotlight these days. Not only are the economic statistics showing an encouraging sign, developments on the external front appear to be moving in favour of Pakistan.
Mind you, MSCI Inc., a provider of investment decision support tools worldwide, has confirmed in a recently released press statement that Qatar and UAE will be omitted from MSCI Frontier Market Index, where the two countries will be reclassified in MSCI Emerging Market index corresponding with the May 2014 index review.
Since Pakistan is linked to MSCI Frontier Market Index, the verdict has brought with itself a new wave of excitement on the local bourse, where the market pundits anticipate the move to bode well for Pakistans equity market.
As a reminder, Qatar and UAE currently frame 34.6 percent of MSCI Frontier Market 100 Index, representing over 20 securities in this index, according to the data published by MSCI.
The reclassification and omission of the two countries from MSCI FM 100 index will result in lifting the weights of remaining countries in the index. While in order to limit country concentration risk, MSCI has proposed a few modifications in the existing methodology, including a stricter free float market capitalisation requirement of $240 million and restraining the cumulative weight of the two largest countries to 40 percent.
In this context, Pakistan, having a weight of 4.3 percent in FM 100 index is likely to go up to 6.8 percent under current methodology and up to 8.4 percent under the proposed methodology, according to MSCI.
At present, nine companies represent Pakistan in this index. These include OGDC, MCB, FFC, UBL, POL, ENGRO, NBP, PPL and HUBC. By virtue of the proposed stricter free-float market capitalisation requirement as mentioned above, Lucky Cement is likely to be one addition to the index, taking the total number of companies from Pakistan to ten.
Considering that the FM 100 index is regarded as the benchmark for tracking frontier market performance, increasing the weightage in the index and addition of companies means increased representation of Pakistani scrips in the frontier market. By the same token, investor confidence (both local and foreign) is likely to get a boost, resulting in increased participation and hence higher foreign flows. That augurs well for Pakistans financial system!
MSCI brings a new wave of excitement | Business Recorder
