Investment research firm and stock markets index provider, Morgan Stanley Capital International (MSCI) has removed Bank Alfalah Limited (BAFL), Engro Polymer and Chemicals Limited (EPCL), and Indus Motor Company (INDU) from its Frontier Markets (FM) Small Cap Index.
In its latest update, MSCI has announced changes in the constituents of its Pakistani indices, removing three Pakistani stocks from the index which will be effective from May 31, 2023.
Besides the deletions, no company has been added from the Pakistan Stock Exchange (PSX) to the MSCI FM Small Cap index during this review. Additionally, there is no change for Pakistan in the MSCI FM Standard Index.
Currently, Pakistan’s weight in the MSCI FM Standard index is estimated at 0.6 percent including ENGRO and OGDC being the two constituents, according to data by Arif Habib Limited (AHL).
Pakistan’s weight in the MSCI FM 100 index is estimated at 2.1 percent with ENGRO being the largest (0.38 percent) while HBL and TRG being the smallest (0.2 percent each) companies. The country remains the second cheapest market in the MSCI FM index in terms of PE(x) and PB(x) multiples.
From a liquidity perspective, Pakistan is the third most liquid market in the MSCI FM universe.
To recall, Pakistan was reclassified into MSCI FM Index from Emerging Markets (EM) last year in November 2021. Pakistan had met the requirements for market accessibility under the classification framework for EM however it no longer met the standards for size and liquidity which led to the reclassification.
Source: Pro Pakistani