Pakistan to maintain its status in MSCI Review

May 5, 2021

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MSCI Inc. is all set to publish the May’2021 Semi-Annual Index Review (SAIR) for MSCI Equity Indexes on May, 11, 2021. The changes in the review will be applicable from May, 28, 2021.

Pakistan’s benchmark KSE-100 index has Increased by ~9% since the last review held in Nov’20, whereas the country’s Standard Index has underperformed the Emerging Market Index by 23%. Due to the index continuity rule, no changes are expected in the stocks that are included in Pakistan’s MSCI Standard Index. However, there is a possibility that PKGS maybe replaced by TRG in the upcoming review.

MSCI Pakistan currently has three constituents including OGDC, HBL, and MCB. Based on the minimum criteria for Emerging Markets in the last review, the total market capitalization requirement is around USD 1,830Mn, with a free-float market capitalization of USD 915Mn and Annualized Traded Value Ratio (ATVR) of 15%. Except for OGDC, no other company meets all rules. Hence, it is expected that Pakistan will be put on a monitoring list due to its failure to meet the eligibility criteria even after applying the 2/3rd buffer rule.