FTSE Russell demotes Pakistan equities to frontier market 

July 04, 2024 (MLN): Pakistan has been downgraded to frontier market status from secondary emerging market status by FTSE Russell, a move that could result in millions of dollars in outflows and negatively impact the nation's equities.

According to the index compiler's statement on Wednesday, Pakistan's market did not meet the minimum securities count requirement necessary to maintain its current status.

This change will take effect on September 23.

The country's stock market has been plagued by debt concerns and political instability, leading to significant volatility and a decline in market capitalization over the years.

In 2021, MSCI Inc. downgraded Pakistan from emerging-market status just four years after its initial upgrade, due to shrinking market size and liquidity.

Despite a recent surge in the benchmark KSE-100 Index, which has outperformed most global peers in the past 12 months thanks to a loan agreement with the International Monetary Fund, FTSE Russell had already placed Pakistan on its watch list for potential demotion.

The index compiler cited a steady decrease in the nation's index weight and a drop in "minimum investable market capitalization" below the required threshold.

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