MSCI reclassifies MSCI Pakistan index from emerging markets to frontier markets

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NEW YORK–(COMMERCIAL THREAD) – MSCI Inc. (NYSE: MSCI), a leading provider of decision support tools and services to the global investment community, today announced that it will reclassify the MSCI Pakistan Indices from emerging markets to frontier markets.

This conclusion follows comments received from market participants during its recent consultation on a market reclassification proposal for the MSCI Pakistan Index. MSCI will reclassify MSCI Pakistan Indices from Emerging Markets to Frontier Markets in a single step, coinciding with the Semi-Annual Index Review (SAIR) of November 2021. Based on a simulation using pro forma data as of August 31, 2021, this would lead to the inclusion of four stocks in the MSCI Frontier Markets index with an estimated index weight of 1.90%.

Although the Pakistani equity market meets market accessibility requirements under the Emerging Markets Classification Framework, it no longer meets size and liquidity standards. More specifically, the index continuity rules, as described in section 2.4 of the MSCI Global Investable Market index methodology, have been applied since the half-yearly index review of November 2018 to maintain the three components required in the index. MSCI Pakistan Index. As of the November 2019 SAIR, no security in the MSCI Pakistan equity universe meets the size and emerging market liquidity criteria of the MSCI Market Classification Framework.

Starting from the SAIR in November 2021, the MSCI Pakistan Indices will be rebalanced based on the size and liquidity requirements for smaller mid-level liquidity frontier markets, as described in Section 5.2 of the MSCI Global Investable Market Indices Methodology.

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