In the latest semi-annual index review for MSCI Equity Indices, the provider of international investment decision support tools has added three Pakistani companies to the MSCI Frontier Markets Small Cap Index.
The companies added are Indus Motor Company, Lafarge Pakistan Cement and Murree Brewery. No Pakistani company was deleted from the MSCI Frontier Markets Small Cap Index in the review announced by the Geneva-based investment advisory firm on November 6.
Earlier in May, nine companies from Pakistan – Abbott Laboratories, Dawood Hercules, Fauji Cement, Habib Metro Bank, IGI Insurance, National Foods, Packages Limited, Shell Pakistan and Hub Power Company – were added to the MSCI Frontier Markets Small Cap Index.
International institutional investors use different MSCI indices – such as frontier, emerging, China and US markets – to create balanced portfolios aimed at generating maximum returns while keeping in view their overall risk appetite.
Meanwhile, no Pakistani company was either added to or deleted from the MSCI Frontier Markets Index in the latest review.
Pakistan’s new weight in the MSCI FM Index is not yet available. According to Topline Securities research analyst Vahaj Ahmed, Pakistan’s weight will cross 7.5% following the successful offering of Oil and Gas Development Company (OGDC) shares.
The government is offering 10% of its stake in OGDC to institutional and general investors that represents 7.5% of the total paid-up capital of the company. This will increase the company’s free-float from 15% to 22.5%.
Four new companies were added to the index six months ago while one company was removed. However, the decision to increase the number of Pakistani companies was mainly because of the reclassification of two major economies – Qatar and the United Arab Emirates – as MSCI emerging markets. Their previous status was of frontier markets.
Published in The Express Tribune, November 8th, 2014.
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