KARACHI: The financial markets were jubilant on Thursday after the MSCI, the leading provider of research-based indices and analytics, announced: “As part of this consultation, MSCI will also be seeking feedback on the proposal to re-classify the MSCI Pak­istan Index to emerging market status.”

The decision would be announced in June 2016.

The proposal is one of the several that MSCI included in “2016 Market Cl­ass­ifi­cation Proposals”.

Analysts at AKD Sec­urities said: “Wary of continuous foreign selling pressure, the market will most likely cherish Pakistan’s inclusion into the EM space.”

They expected it to raise the local market’s profile, invite foreign liquidity and propel market sentiment.

“Potential multiple re-rating is also on the cards as precedence indicates sharp expansion upon inclusion in the EM space”.

Analysts noted that, as per the proposals, the MSCI Pakistan index would have a potential weight of 0.19pc in Emerging Markets, significantly lower than the current 9pc weight in the Frontier Market (FM) space.

Out of the 16 companies that are currently part of the MSCI index in FM, only nine companies would be eligible to join EM, giving Pakistan a 0.19pc weight, making it the smallest county by weight, as per the proposal. Out of those nine, OGDC, HBL and MCB will be placed into the large-cap index while UBL, Lucky, FFC, Engro, Hubco and PSO would likely be placed in the mid-cap index.

Published in Dawn, April 1st, 2016