KARACHI: Global index provider MSCI disclosed on Friday names of the stocks that will constitute its Pakistan indexes from Dec 1.

The announcement follows MSCI’s downgrade of Pakistan indexes in August from its Emerging Market to Frontier Market.

Global institutional investors often use indexes like the ones provided by MSCI to make passive investments in different countries. These index-tracking investors increase or decrease their exposure to a particular market in line with any changes in its weight or classification by the index provider.

Pakistan’s weight in the MSCI Frontier Market Large Cap Index is going to be around 1.36 per cent, with Lucky Cement (0.56pc weight), Habib Bank (0.42pc weight) and MCB Bank (0.37pc weight) making the cut, according to Arif Habib Ltd.

However, Topline Securities and JS Global put the estimated weight at 1.25pc.

MSCI also announced 14 constituents under its Small Cap Index. They are Engro Corporation Ltd, Engro Fertilisers Ltd, Fauji Fertiliser Company Ltd, The Hub Power Company Ltd, Mari Petroleum Company Ltd, Millat Tractors Ltd, Pakistan Oilfields Ltd, Pakistan Petroleum Ltd, Pakistan State Oil Company Ltd, The Searle Company Ltd, Systems Ltd, TRG Pakistan Ltd, United Bank Ltd and Bank Alfalah, said a research note by Arif Habib Ltd.

MSCI had previously simulated that Oil and Gas Development Company Ltd would become a part of the Large Cap Index. However, it could not be added to the final list while Indus Motor Company Ltd, Bank AL Habib, National Bank of Pakistan Ltd, Packages Ltd and Abbott Laboratories Ltd were axed from the final MSCI Small Cap list.

JS Global expects the pace of foreign selling will continue to remain in the limelight till the end of November, specifically in Lucky Cement Ltd, Habib Bank Ltd and MCB Bank Ltd. “On the other hand, Systems Ltd’s surprise inclusion will continue to attract some foreign flows in the technology sector,” it added.

Published in Dawn, November 13th, 2021