Outflows expected of $55-60mn on the basis of fresh MSCI score card

By Muzzammil Aslam

November 14, 2018 (MLN): As anticipated, MSCI has released its new review for the next six months. Points to consider are:

1) Pakistan still managed to retain its spot in emerging market classification.

2) Pakistan's large cap universe shrinks in size to HBL, OGDC,  and MCB.

3) Latest exclusion from large caps are UBL & LUCK.

4) Overall it’s not only Pakistan that has witnessed exclusions. Turkey witnessed 6 stocks deletions, Taiwan & Malaysia may see an exit of 4 stocks each, while India lost 2 scrips.

5) On the other hand, China's presence in MSCI universe has strengthened further as it witnessed an addition of 12 stocks, while only 10 were deleted.

6) Expected outflows are $55-60 million, owing to the removal of LUCK and UBL.

7) The rebalancing date is on November 30th.

8) Recall, on May 31st 2017 at time of upgrade, Lucky traded at 960/share and UBL 260/share.

9) Lucky trading at 62 percent and UBL at 59 percent discounted price in dollars term from May 31st, 2017.

10) Both stocks offer great values and already priced in their exclusion.

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