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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