FTSE places Pakistan on watch list for market demotion

September 30, 2023 (MLN): FTSE has included Pakistan in the watch list for potential demotion, moving from Secondary Emerging to Frontier market status, as per the latest annual equity country classification review for equities and fixed income released by FTSE on September 28.

Over the last few years Pakistan has experienced a steady decrease in its index weight within FTSE Russell global benchmarks.

Accordingly, this has now resulted in the market failing to meet the minimum investable market capitalisation exit level threshold required to retain a Secondary Emerging market status, it noted.

According to brokerage house EFG Hermes Pakistan limited, Pakistan's total investable market capitalization in the FTSE Emerging All Cap index was $3.01 billion.

Meanwhile, the minimum investable market capitalization exit level threshold needed to retain Secondary Emerging market status was $3.49bn.

If FTSE decides to downgrade Pakistan in 2024, the market may face outflows from FTSE passive trackers estimated at $95 million, it added.

Pakistan will next be assessed against the minimum investable market capitalisation exit level threshold based on data as of the close on December 29, 2023.

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