KARACHI: Index provider Morgan Stanley Capital International (MSCI) on Mondayreclassified Pakistan as an emerging market from frontier market status Emerging Markets status, driving a bullish trend in the Pakistan Stock Exchange.
The benchmark KSE-100 index surged 400 points to reach 52,700 level at the open on Tuesday. The index also crossed an all-time high of52,500 points on Monday ahead of the expected MSCI announcement.
The MSCI Pakistan Index was upgraded from frontier market to its emerging market classification as part of the index'ssemiannual market reclassification. The Pakistan indexes will fully converge with the MSCI Provisional Pakistan Indexes, effective June 1. There will be no additions to and 10 deletions from the MSCI Pakistan Index and 11 additions and six deletions from the MSCI Pakistan Small Cap Index.
During the reclassification, the MSCI added 57 securities and removed 28 securities from its All-Country World Index.Italso announced changes to its emerging markets index, with the three largest additions measured by market cap slated to be Indian Oil Corp Ltd of India, Novolipetsk Steel of Russia and Bancolombia SA of Colombia.
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The MSCI, in a review on June 14, 2016, had promoted Pakistan from theFrontier Market to Emerging Market status.
The new changes will be implemented as of the market close on May 31. The announcement was part of quarterly adjustments MSCI makes to its indexes, which it says are tracked by $9.5 trillion in assets.
With additional input from Reuters