Karachi: The recent rally in the Pakistan stock market has raised the possibility of Pakistan’s inclusion in the MSCI Emerging Market Index.
Pakistan was part of the MSCI Emerging Market Index from 1994 to 2007, but in 2008, Pakistan was excluded from the index. After that, Pakistan was eligible for inclusion again in 2017, but the economic crisis of 2021 once again eliminated the chances of inclusion.
Today, Pakistan is once again ready for inclusion. According to the MSCI market classification framework, Pakistan needs three companies with a market capitalization of $ 1,260 million and a free float-based market capitalization of $ 630 million with a 15% annual traded value ratio (ATVR).
This week, three Pakistani companies, Fauji Fertilizer, Mari Petroleum and United Bank, crossed the required threshold, with the three companies trading with market capitalizations of $1 billion, $650 million and $665 million respectively, while another 8 companies are in line.
As a result, it is time for policymakers to present Pakistan as an emerging market. In case the Pakistan Stock Exchange is declared an emerging market from an emerging market, foreign investment will accelerate further, which will push the stock market higher.
