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MSCI Downgrades Pakistan to Frontier Market

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“MSCI Inc. (NYSE: MSCI) announced that it will reclassify the MSCI Pakistan Indexes from Emerging Markets to Frontier Markets,” it said in a press release.

“This conclusion follows feedback received from market participants from its recent consultation. MSCI will reclassify the MSCI Pakistan Indexes from Emerging Markets to Frontier Markets in one step, coinciding with the November 2021 Semi-Annual Index Review (SAIR),” the release added.

“Based on a simulation using pro forma data as of August 31, 2021, this would lead to the inclusion of four securities in the MSCI Frontier Markets Index with an estimated index weight of 1.90%.”

The MSCI said that while the Pakistani equity market meets the requirements for market accessibility under the classification framework for Emerging Markets, it no longer meets the standards for size and liquidity.

“Since the November 2019 SAIR, there have been no securities in the MSCI Pakistan equity universe that meet the Emerging Markets size and liquidity criteria within the MSCI Market Classification Framework.”

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