Lahore: Pakistan will make its re-entrance into S&P’s Emerging Broad Market Index from S&P Frontier BMI next month, following the country’s inclusion into the MSCI emerging market index in June, earlier this year.
It follows from Pakistan’s downgrade back in November 2008 from emerging to frontier, when worsening stock market conditions and a lack of investability had been cited as the main reasons for this move.
Pakistan Stock Exchange (PSX) has since then grown from strength to strength, which culminated in it being declared the best performing stock market of Asia in 2016 and registered an astounding return of 46pc during that period.
The removal of the market floor rule from the PSX has helped in an increase of liquidity at the PSX, and according to S&P now stands eligible for reclassification into emerging market index as per a circular released in December of 2016.
Last two months, have been a mixed bag for the PSX, as political uncertainty in form of Supreme Court’s ruling into the Panamagate case had riled the market and ended in the disqualification of Nawaz Sharif as Prime Minister on the 28th of July.
Since the ex-PM’s disqualification, the KSE-100 index has endured several lows alongside bearish sentiments due to continuing political uncertainty which have left a trail of destruction at the PSX.
As Pakistan prepares to re-enter S&P’s Emerging Broad Market Index again after a lapse of almost nine years next month, it will be interesting to see what implications it holds for the stock market in the not so distant future.
