MSCI marginally raises Pakistan's weight in flagship index

MSCI marginally raises Pakistan’s weight in flagship index

In June of last year, MSCI (formerly Morgan Stanley Capital International), a company that produces influential indices of shares that are traded on stock exchanges around the world, decided - after years of speculation - that it would finally include a few hundred mainland Chinese stocks into its listing.

Also, Taiwan was not the only market affected by a cut after MSCI added 234 Chinese yuan-denominated A shares to its indexes, she said, pointing to South Korea and India, whose weightings in the MSCI Emerging Markets Index were cut by 0.35 and 0.14 percentage points, respectively.

Brokerages estimated Pakistan's weight in MSCI emerging market index to slightly fall after inclusion of China A shares. MSCI said on Tuesday, however, that these weightings will double in September.

Additionally, the country's weight in the small-cap index was revised to 0.81pc.

He points to ZTE, which "stopped trading in both its Hong Kong- and Shenzhen-listed stocks for a month, after the USA banned American firms from selling products to the company", and China Railway Group, whose "Shanghai-listed shares have been suspended for almost two weeks, pending an announcement on its plan to change some of its debt into equity". PAEL and NRL were removed due to massive declines in their market capitalisation since semiannual index reviews in May and November past year, while IGIHL was likely removed owing to erosion in its market liquidity.

"There has been no change in MSCI main index against our expectation of addition of Pakistan Petroleum Ltd, as the company was not eligible on the basis of lower free float as per MSCI assumption, we view", stated Arif Habib Ltd.

There was no change announced for Pakistan constituents in the standard emerging market index.

Five companies have maintained their position in the MSCI EM Index.

The next review of semiannual review of MSCI has been scheduled to be held on August.

The inclusion of these so-called A shares - stocks that historically were available only to Chinese investors - is a stamp of financial credibility that will open China to more global investment. The second phase of the entry will take place in Sep 2018.

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