PSX may be reclassified to FM index

The Pakistan Stock Exchange (PSX) is highly expected to be reclassified among lesser advanced economies in Frontier Market (FM) index by Morgan Stanley Capital International (MSCI) on Wednesday.

According to a report by a local media outlet that quoted market experts, the MSCI’s likely decision would be a blessing in disguise for “PSX would come back into the limelight.

It may be recalled that PSX has remained part of MSCI’s leading Emerging Market (EM) index since May 2017 when the benchmark KSE 100 Index hit all-time high close to 53,000 points, but failed to sustain the level and never returned back to that high level since then.

Initially, the PSX’s weightage (size) would be 5.8% in FM index compared to 0.02% in EM index at present, according to the MSCI working.

The MSCI Pak FM would have a weight of 2.3% in the MSCI FM Index and 5.8% in the MSCI FM 100 Index.

The market classification framework for MSCI FM is full market capitalisation of $1.17 billion, free float market capitalisation of $88 million and average liquidity market (ATVR) at 2.5% compared to MSCI EM criteria of full market capitalisation of $2.34 billion, free float market capitalisation of $1.17 billion and ATVR of 15%.

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