Pakistan’s weight in MSCI Frontier Markets Index falls to 4.8pc

ISLAMABAD: Pakistan’s representation in the MSCI Frontier Markets Index has declined in the latest review, with the country’s weight falling to 4.8 per cent from 5.8 per cent in the previous assessment.

The change was highlighted in MSCI’s May 2026 semi-annual review of its Frontier Market Indexes. According to Topline Securities, the reduction in Pakistan’s share was mainly linked to a nearly 13 per cent drop in the market capitalisation of existing Pakistani constituents. During the same period, the overall capitalisation of the global frontier markets index rose by about 6 per cent.

Index changes for Pakistan

MSCI also revised the composition of its Pakistan index as part of the review. Habib Metro Bank (HMB) has been added to the main Pakistan index, while Searle Pakistan Limited (SEARL) has been removed.

Topline Securities said HMB became eligible for inclusion after meeting the required liquidity threshold, referred to as the annualised traded value ratio (ATVR). The brokerage house said the bank had already met the free-float requirement earlier, but its inclusion in the latest review appeared to be driven mainly by stronger trading liquidity.

SEARL, on the other hand, was excluded after its FIF-adjusted free-float market capitalisation dropped below MSCI’s minimum requirement, according to Topline Securities.

Market capitalisation thresholds

The review stated that the minimum free-float market capitalisation threshold for the May 2026 review was $116 million.

SEARL’s adjusted free-float market capitalisation had fallen to nearly $82 million by the end of April 2026, which led to its removal from the index.

In contrast, Habib Metro Bank’s adjusted free-float market capitalisation stood at about $129.5 million, placing it above the required threshold.

The latest review therefore reflects both a decline in Pakistan’s overall weight in the broader frontier markets benchmark and a reshuffle within the country’s constituents in the MSCI index.

Topline Securities attributed the fall in Pakistan’s overall share to the weaker market capitalisation performance of existing Pakistani stocks relative to the broader frontier market universe, which posted an increase over the same review period.

The changes announced by MSCI in its May 2026 semi-annual review will determine Pakistan’s updated standing in the Frontier Markets Index, with HMB entering the benchmark and SEARL exiting after failing to maintain the required adjusted free-float market capitalisation level.