• MSCI Barra, a leading provider of benchmark indices and risk
management analytical products, today announces the results of the May
2010 Semi-Annual Index Review of its indices.
• Changes in country representation and weightages have direct
repercussion for the flow of foreign investments especially in the
emerging and frontier markets. This is because many offshore funds
benchmark their country-wise investment quotas by closely following MSCI
indices. With Pakistan market regaining its foothold on the radar of
offshore funds, changes in constituents for MSCI Pakistan Index has
gained significance in the recent times. The latest numbers suggest that
foreign funds collectively hold 7.2% of Pakistan market. Adjusted
for free float, the share of foreign holding emerged more significant at
~30% (KSE's market free float is ~25%).
• As per the press release, Pakistan will continue to be classified into
Frontier Market Index. While no new company added in MSCI Pakistan
Index, JSCL would be deleted from MSCI Pakistan Index effective May 26,
2010.
• We see neutral impact of the MSCI review on KSE as the announcement is
quite inline with the expectations.
• Our previous write-up on MSCI reads "since no public consultation (a
prerequisite for market reclassification) is opened for any upgrade
consideration, we believe that Pakistan will continue to be classified
into the Frontier Market Index in the upcoming May 2010 MSCI Index
• Before May 2010 Index review, the MSCI Pakistan Index included 14
constituents with a total float adjusted market capitalization of
US$4.6bn (based on April 20, 2010 prices). With a weight of 4.0% in the
MSCI Frontier Markets Index, Pakistan stood as the 7th largest MSCI
country index out of the 25 MSCI Frontier Markets prior to this
rebalancing.
Review."
No comments:
Post a Comment