The move is seen as a rare positive at the KSE - File photo.

KARACHI: Twelve securities traded on the Pakistan capital market were added to the MSCI Frontier Markets Index at the semi-annual index review on May 13. The changes would take effect from the close on May 29.

Following its earlier expulsion from the MSCI Emerging Market Index as a protest against the imposition of ‘floor’ under the KSE-100 index late last year, MSCI Pakistan index was able to find a foothold in the Frontier market index, represented by the following 12 companies: Fauji Fertilizer Company; Hub Power Company; Jahangir Siddiqui & Co; Kot Addu Power Company; MCB Bank; National Bank of Pakistan; NIB Bank; OGDC; Pakistan Oilfields; PSO; PTCL and UBL.

Analyst and stock strategist Mohammad Sohail at the Karachi Stock Exchange observed that the inclusion of Pakistan in the MSCI Frontier Market Index was not a big surprise as index provider had already disclosed those plans in March.

‘However, the country’s index downgrade from emerging market to frontier market will attract lower portfolio investment since global funds tracking Frontier Markets are fewer in number than those watching the emerging markets,’ he said.

A statement released by the MSCI from Geneva on Thursday announced changes to at least seven MSCI Equity Indices, including that of the MSCI Frontier Markets.

The apex index provider recalled that it had already announced on March 23 that Pakistan would be added to the MSCI Frontier Markets Index at the time of the May 2009 Semi-Annual Index Review.

‘In addition, as announced on Feb 18, Argentina will simultaneously be removed from the MSCI Emerging Markets Indices and added to the MSCI Frontier Markets Index at the time of the May 2009 Semi-Annual Index Review.’ 

Though a special mention was not made, another new entrant in the Frontier Market appeared to be Croatia.

Wrapping up the details, The MSCI Inc observed: ‘Thirty-two securities will be added to and 23 will be deleted from the MSCI Frontier Markets Indices. The three largest additions to the MSCI Frontier Markets Index are Neal & Massy Holdings (Trinidad & Tobago), Telecom Argentina B ADR (Argentina) and MCB Bank (Pakistan).’

MSCI Inc, has been acclaimed as a leading provider of international Equity indices, which include 120,000 indices calculated daily across more than 70 countries.  

Headquartered in New York, MSCI Inc maintains research and commercial offices around the world. Morgan Stanley, a global financial services firm, holds the controlling equity in MSCI Barra.

Source: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/11-12-pakistani-scrips-enter-msci-frontier-index--10