FTSE includes six Pakistani companies in its index

Development likely to attract further foreign inflows in country’s stock market


Salman Siddiqui March 03, 2017
Development likely to attract further foreign inflows in country’s stock market. PHOTO: REUTERS

KARACHI: The Pakistan Stock Exchange (PSX) continued to attract international attention, as six of its listings were taken on board by the Financial Times Stock Exchange (FTSE) index.

FTSE is a London-based provider of indexes, which helps international investors track their funds at bourses worldwide.

FTSE, in its semi-annual review, included Habib Bank, Mari Petroleum, Searle Pakistan, Engro Fertilizers, Fauji Cement and Nishat Mills from Pakistan into its Global Equity Index Series Asia Pacific excluding Japan.

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“The changes will be effective after the close of business on Friday, March 17, 2017 (i e on Monday, March 20, 2017),” FTSE Russell reported on its official website.

The PSX witnessed a bull ride on Thursday, as its benchmark KSE 100-Index surged 1.44%, or 703.92 points, and closed at 49,696.08 points.

Invest and Finance Securities said in a note, “we do highlight the news item as a major sentiment booster, which should aid the market to continue ascending northward.”



The development is believed to trace additional foreign funds into the PSX.

“Since approximately $67.25 billion funds track FTSE Global Equity Index Series, based on the assigned weightages we estimate a total of $56.8 million to enter Pakistan,” the brokerage firm said.

“This [estimated] flow is in addition to the expected $771 million inflow (passive: $374 million and active: $396 million), which we estimated post-MSCI inclusion,” it added.

Earlier, MSCI - another world leading indices provider - announced in June 2016 to upgrade Pakistan into the MSCI Emerging Markets Index in May 2017.

The FTSE website added the FTSE World Asia-Pacific excluding Japan Index is one of a range of indexes designed to help investors to benchmark their Asia-Pacific investments. The index comprises large- and mid-cap stocks providing coverage of the developed and advanced emerging markets in Asia-Pacific excluding Japan.

“The index is derived from the FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalisation,” it said. The FTSE Global Equity Index Series covers around 7,400 securities in 47 different countries-covering every equity and sector relevant to international investors’ needs.

Indexes within the FTSE Global Equity Index Series are designed for the creation of a broad range of financial products, such as index tracking funds, derivatives and exchange traded funds, as well as being performance benchmarks.

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Earlier, Pakistan was part of the FTSE Global Equity Index Series. However, the 2008 crash prompted its drop-out.

“FTSE indexes are used extensively world-wide for benchmarking portfolios, performance measurement, investment analysis, asset allocation, index tracking funds and structured products,” it said.

Published in The Express Tribune, March 3rd, 2017.

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