Three cement companies participate in MSCI FRONTIER INDEX

Karachi:

Morgan Stanley Capital International (MSCI) has included three Pakistani companies in the Frontier Market (FM) index and four more on the FM Small Cap index as part of the May 2025 review.

MSCI, prominent worldwide investment decision support tools, has announced the results of the May 2025 ratio, bringing significant changes to Pakistan’s listed companies to both MSCI Frontier Markets Standard and Small Cap. Changes, effective after the end of the negotiation on May 30, 2025, highlight the increased representation of Pakistan in the global investment landscape, especially in the cement sector.

According to Arif Habib Limited (AHL), Pakistan’s weight on the MSCI FM index is now estimated at about 6.1%, reflecting increasing investor interest and improving market performance.

According to the review, three cement companies have been added – Fauji cement, Maple cement and DG Khan cement – on MSCI FM Standard Pakistan. Without mentioning the deletions, the total number of Pakistani ingredients in the standard index is now increased to 26.

The Topline titles, in her research note, estimate that the combined weight of the three added shares was 26 BPS points on the FM index. Since worldwide funds watching the MSCI border index of about $ 2-3 billion, Pakistan could attract about $ 5-8 million to passive inflows of these additions.

Interestingly, the promotion of DG Khan Cement comes from the cost of removing it from the MSCI Small Cap index, underlining the upgraded market state.

Meanwhile, the small capital index saw the addition of four companies-ARCHROMA Pakistan, At-Tahur Limited, Engro Polymer & Chemicals and Pakistan Reinsurance Company. On the other hand, AGP Limited and Agritech Limited have been deleted by the MSCI small cover index.

The MSCI small cover index now contains 410 components worldwide, with 67 reserves from Pakistan, accounting for about 16% of the total index and hold a 10.7% weight.

Topline noted that companies such as Interloop, Searle and Abbott Laboratories have been maintained in the index, despite the fact that they do not meet the minimum free flood limit ($ 78 million in the latest review), citing the MSCI Buffer rule as a possible reason. This rule allows companies slightly below the doorstep to stay in the index to minimize excessive overthrow.

The inclusion criteria for this review were stricter than in the previous February 2025, with the minimum free strength ceiling rising to $ 78 million from $ 72 million and the total market requirement of up to $ 155 million from $ 155 million.

Maaz Azam, head of research at Optimus Capital, told The Express Tribune that while the latest revision of the MSCI index brings positive news, true success for Pakistan will find itself in its reintegration into the category of emerging markets (EM).

Changes in the MSCI index are widely monitored by institutional investors and passive funds managers around the world. Increasing Pakistan’s representation can not only lead to short -term capital inflows, but also mark the confidence of the economic and key markets.