May 12, 2020 (MLN): The MSCI Semi-Annual Index Review is all set to determine Pakistan’s status as an emerging market on May 12, 2020, the chances of which are barely in the country’s favor.
According to a research report by Spectrum Securities, the likelihood of Pakistan losing out on its emerging market status is backed by the fact that none of the three constituents of the EM Index, i.e. MCB, OGDC, and HBL, have met the minimum free float criteria of $766 million. However, OGDC has managed to meet the full market capitalization criteria of $1,532 million.
Nonetheless, the market analysts at Spectrum Securities believe that Pakistan may get leeway in review this time, owing to the COVID-19 pandemic that has affected the performance of nearly every other company around the globe.
It is pertinent to note that Pakistan’s weight in the EM index is low but quite substantial in the frontier market. So if Pakistan is downgraded to the latter in today’s review, this would trigger foreign inflows.
