Pakistan Realog

KARACHI: Pakistan has been included in Morgan Stanley Capital International (MSCI) Frontier Market Index with the inclusion of twelve Pakistani companies in it.

Morgan Stanley Capital International (MSCI), a leading provider of benchmark indices, announced the results of its May 2009 Semi Annual Index Review for the MSCI Equity Indices Thursday.

The Pakistan index – first inducted in the MSCI Index series in February 1994 was removed from Emerging Market (EM) Index in December 2008 mainly due to restrictions on normal trading by placing the floor in August last year.

“Removal of the price floor in mid December and subsequent smooth functioning of the equity markets propelled Pakistan’s inclusion in the Frontier Index,” believe the analysts Muzzamal Aslam and Farhan Rizvi at JS Research.

They also believed that Pakistan would occupy a relatively higher representation in the MSCI Frontier Index (2.0-2.5 percent) as against only 0.14 percent in the MSCI EM Index prior to its exclusion.

The Pakistani stocks that have been included in MSCI are MCB, NBP, UBL, NIB, OGDC, POL, PSO, KAPCO, HUBCO, FFC, JSCL & PTC having the combined weight of 45 percent in KSE-100 index, the benchmark of Karachi Stock Exchange (KSE).

The inclusion of Pakistan in the MSCI Frontier Index bodes well for the local equity market where foreigners still hold 19 percent of the total free float.

Markets players commenting on the latest development hoped that it would subside the selling pressure from foreign institutes.

Total foreign net selling since December 15 has been recorded at $291million and only on Wednesday, local stock market witnessed net foreign outflow worth $11.41 million that was the third largest after the net sale of $15.91 million on January 28 and the largest offload worth $23.47 million on January 2 this year.

However, despite the exodus of foreign investment, the local bourse remained buoyant even remaining out of the fold of MSCI Index due to positive corporate earnings outlook and economy, which lured the local institutions to invest in the market.

The benchmark KSE-100 index performance remains impressive and surged 23 percent since the removal of floor, highlighting the strength of local market to emerge strong in the present situation of global economic meltdown, which sent ripples in the world stock markets. Currently, foreigners hold 4.7 percent of total market capitalization and 19 percent of free float.

Stock market analysts said that Pakistan market currently trades at an attractive one year forward PE of 6.5x, a deep discount of 40 percent compared to regional markets.

Source: Daily Times

Also Check:

1. Depth of Pakistan stock markets declining sharply
2. KSE WEEKLY REVIEW: Positive developments take KSE index 96 points higher
3. Karachi bourse loses 254 points on technical correction
4. Foreign real estate projects in Pakistan feel the heat of the UAE market downfal
5. Pakistan becomes third largest rice exporting country
6. Rs 20 bln market support fund in next two days: Tareen
7. KSE 100 index closes 26.30 pts up on institutional support
8. Pakistan’s IT exports in hot waters, up 19 percent only
9. Economic slowdown leads to asset size contraction in mutual fund industry
10. Review of Pakistan’s Economic Situation July-February 2008-09
11. July-April foreign investment down 43 percent
12. KSE index freeze stays
13. KSE index freeze to be removed on October 27
14. CCP says floor on equity index illegal
15. KSE included in Dow Jones Indexes
16. Islamabad stocks surge 34 points
17. KSE jumps 209 points to hit 8-month high
18. KSE end lower; rupee flat
19. KSE-100 Index inches further up by 14 points
20. KSE manages to close higher, 100-share index surges 14 points
21. MCB Bank signs agreement to acquire RBS Pakistan
22. Karachi bourse manages to stay above 8,000 points
23. Moodys upgrades Pakistan’s rating
24. Selective buying helps KSE gain 63 points
25. Selective buying helps KSE gain 63 points
26. Moody’s rating change pushes KSE 100-share index up by 62 points
27. Foreign investment at KSE hits $10 million mark
28. Foreign investment at KSE hits $10 million mark
29. KSE WEEKLY REVIEW: Islamabad stocks gain 50 points
30. KSE down 40 points on profit-selling
31. Pakistan set to recapture football market
32. KSE index crosses 8,500 level on heavy buying
33. Investment, results and improved rating push KSE 433 pts up
34. KSE ends 1.5pc higher; rupee firms
35. KSE-100 Index cross 8,900 level
36. Foreign investors inject $95m into bourses
37. KSE reaches highest level of the year at 8,878.64 points
38. First public offering after 10 months
39. Karachi stocks retreat 2009 record close
40. KSE falls 67 points on technical correction
41. Index down 88.79 points
42. ISE index up 47.98 points
43. KSE adopts industry benchmark system
44. 90 pc investors return to stock market, as global slowdown eases
45. KSE-100 index gains over 2pc to hit year’s high
46. Buying, hopes of foreign investment push KSE-100 index 277 points up
47. KSE introduces trading in ‘Debt Market Securities’
48. Index loses 49.58 points
49. Rise in world oil rates, fall in CPI push 100-share index 44 points up
50. Pakistan may not re-enter eurobond market before 2011-12

41 views