Morgan Stanley Capital International (MSCI) Inc. has announced the inclusion of seven Pakistani companies in its Frontier Market (FM) Index and FM Small Cap Indexes as part of the August 2024 index review. The changes will be effective after the close of trading on August 30, 2024.
Sazgar Engineering Works has been added to the MSCI Frontier Market Index, while six other Pakistani companies—Atlas Battery, Ghandhara Automobiles, Habib Sugar Mills, Lotte Chemical Pakistan, Octopus Digital, and Soneri Bank—have been included in the MSCI FM Small Cap Indexes.Â
However, HASCOL Petroleum and Sazgar Engineering Works have been removed from the MSCI FM Small Cap Indexes.
According to brokerage firm Topline Pakistan Research, the addition of SAZEW is likely to increase the weight of Pakistan by 7 basis points. Similarly, existing constituents’ weight is also expected to increase from 4.35% to 4.49%. These both will take total Pakistan weight to 4.56%, up 21 bps.
Assuming $5-10 billion AUMs tracking MSCI Frontier Market Indexes, Topline anticipated gross inflows of $10-21 million. Within this, gross inflows in SAZEW are expected at $3.3 million to 6.6 million.
Topline Securities earlier forecasted an increase in Pakistan’s weight in the MSCI Frontier Market Index, estimating a rise by 35-45 basis points (bps), potentially reaching 4.7-4.8% from the previous 4.2-4.3%. The firm predicted that this increase could lead to gross inflows of $20-45 million.
