MSCI Inc., a leading provider of research‐based indexes and analytics, announced today the results of the May 2016 Semi‐Annual Index Review.
Impact
There have been no additions and 5 deletions in the Frontier Market Index. However, no new additions or deletions have been made for Pakistan.
In the Frontier Market Small Cap Index, there have been 11 additions and 19 deletions, which include 2 additions and 4 deletions for Pakistan.
The new companies that have been included are:
(1) Honda Atlas (KA:HATC) and (2) Pakistan Int’l Bulk (KA:PIBT).
The companies that have been deleted include:
(1) Abbot Lab (KA:ABBT)
(2) Bank Al-Habib (KA:BKEQ)
(3) Dawood Hercules (KA:DAWH) and
(4) Habib Metro (KA:HMB).
The changes will be effective from May 31, 2016.
Moreover, the press release remained silent on Pakistan’s progress in the Emerging Markets. To recall, MSCI has placed Pakistan in the 2016 list for for a potential reclassification to emerging market in the Market Reclassification Review for June 2015.
Pakistan was in MSCI Emerging Markets from 1994 to 2008. However, imposed floor in 2008 led MSCI to remove it from the Emerging Markets and classify it as a standalone country index.
MSCI made Pakistan a part of the Frontier Markets Index in May 2009. At present, MSCI Pakistan has 16 constituents, with MCB Bank (KA:MCB), Habib Bank (KA:HBL), Lucky Cement (KA:LUKC), Oil and Gas Development Co. (KA:OGDC), and Engro Corporation (KA:EGCH) as its top 5 contributors.
Outlook
We have an overall ‘positive’ stance on the market as we hold true to the Pakistan theme of economic review.