LAHORE: Pakistan has escaped being downgraded from Morgan Stanley Capital International (MSCI) emerging market (EM) index on Tuesday after it raised the country’s weight in the flagship index to 0.080 percent in the semi-annual review from 0.079 percent in November 2017.
And analysts said this was a credit positive move, although Topline Security projected it saw Pakistan’s weight in MSCI Emerging Market Index slightly falling after partial inclusion of China A shares.
While there was no change in the MSCI Global Standard Indexes, MSCI has removed Pak Elektron (PAEL), National Refinery (NRL) and IGI Holdings Limited (IGIHL) from the MSCI Global Small Cap Indexes. All changes will be implemented from the close of May 31, 2018.
Other development coinciding with the index review is the partial inclusion of China A shares in the MSCI China Index as well as relevant global and regional composite indexes, such as the MSCI Emerging Markets Index.
According to a Topline Security flash note, China A-shares (234 stocks), will represent an aggregate weight of 0.39% in the MSCI Emerging Markets Index at a 2.5% partial inclusion factor during the first step. The second phase of the entry will take place in Sep 2018.
While there were rumors pertaining to addition of Pakistan Petroleum (PPL) to MSCI EM index before the announcement, the standard MSCI EM index remain unchanged with existing 5 stocks (large & midcap) — Habib Bank (HBL), Oil & Gas Development Company (OGDC), United Bank (UBL), MCB Bank (MCB) and Lucky Cement (LUCK), said Topline.
