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Business Recorder
15-05-2025
- Business
- Business Recorder
7 Pakistani cos added to MSCI FM & SC Indexes
KARACHI: Morgan Stanley Capital International (MSCI) has added seven Pakistani companies to its Frontier Market (FM) and Small Cap Indexes in its latest semi-annual index review, boosting the country's global equity market visibility. Morgan Stanley Capital International (MSCI) is a global research, data, and technology company that provides indices, research, and other services to investors worldwide. As per details cited by Topline Research, the minimum threshold for free float and total market capitalization for selection in the Frontier Market Index was set at $78 million and $155 million, respectively. Three Pakistani companies — Fauji Cement Company, DG Khan Cement Company, and Maple Leaf Cement — have been added to the MSCI Frontier Markets Index, effective from May 30, 2025. This brings the total number of Pakistani companies in the index to 26. Pakistan's weight in the MSCI Frontier Market Index is estimated to be around 6-6.5%, with the addition of the three cement companies expected to attract inflows of $5-8 million, assuming $2-3 billion in funds tracking the index globally. In the Small Cap Index, four Pakistani stocks have been added: Archroma Pakistan, At-Tahur Limited, Engro Polymer & Chemicals, and Pakistan Reinsurance. DG Khan Cement has been moved to the main FM Index, while AGP Pharma and Agritech Limited have been deleted. Topline Research noted that Interloop, Searle Limited, and Abbott Laboratories have been retained in the index despite not meeting the $78 million free float threshold, thanks to the buffer rule. This rule allows for flexibility in index inclusion. The firm drew parallels with a similar past instance where TRG was retained despite not meeting the threshold, only to be removed in a subsequent review. The index review holds particular significance for Pakistan as it continues to rebuild investor confidence following its 2021 downgrade from Emerging Market to Frontier Market status. The inclusion is anticipated to attract moderate passive fund inflows and enhance the visibility of Pakistani equities among global frontier market investors. Copyright Business Recorder, 2025
Express Tribune
14-05-2025
- Business
- Express Tribune
Three cement firms join MSCI frontier index
Listen to article Morgan Stanley Capital International (MSCI) has included three Pakistani companies in its Frontier Market (FM) Index and four more in its FM Small Cap Index as part of the May 2025 index review. MSCI, a prominent global provider of investment decision support tools, announced the results of its May 2025 semi-annual index review, bringing major changes for Pakistan's listed companies in both the MSCI Frontier Markets Standard and Small Cap indices. The changes, effective after the close of trading on May 30, 2025, highlight increased representation of Pakistan in the global investment landscape, particularly in the cement sector. According to Arif Habib Limited (AHL), Pakistan's weight in the MSCI FM Index is now estimated at around 6.1%, reflecting growing investor interest and improving market performance. As per the review, three cement companies - Fauji Cement, Maple Leaf Cement and DG Khan Cement - have been added to the MSCI FM Standard Pakistan Index. With no deletions reported, the total number of Pakistani constituents in the standard index now rises to 26. This includes major blue-chip names such as UBL, Lucky Cement, OGDC, Engro, MCB Bank, HBL, FFC and now the three cement firms. Topline Securities, in its research note, estimated that the combined weight of the three added stocks was 26 basis points (bps) in the FM index. Given that global funds tracking the MSCI's Frontier Index amount to around $2-3 billion, Pakistan could attract an estimated $5-8 million in passive inflows through these additions alone. Interestingly, DG Khan Cement's promotion comes at the cost of its removal from the MSCI Small Cap Index, highlighting its upgraded market status. Meanwhile, the small-cap index saw the addition of four companies – Archroma Pakistan, At-Tahur Limited, Engro Polymer & Chemicals and Pakistan Reinsurance Company. On the flip side, AGP Limited and Agritech Limited have been deleted from the MSCI Small Cap Index. The MSCI Small Cap Index now contains 410 constituents globally, with 67 stocks from Pakistan, making up roughly 16% of the total index and holding a 10.7% weight. Topline noted that companies like Interloop, Searle and Abbott Laboratories were retained in the index despite not meeting the minimum free-float threshold ($78 million in the latest review), citing the MSCI's buffer rule as the likely reason. This rule allows companies slightly below the threshold to remain in the index to minimise excessive churn. The inclusion criteria for this review were stricter compared to the previous one in February 2025, with the minimum free-float market cap raised to $78 million from $72 million, and the total market cap requirement up to $155 million from $145 million. Maaz Azam, Head of Research at Optimus Capital, told The Express Tribune that while the latest MSCI index review brings positive news, the true success for Pakistan will lie in re-entering the emerging markets (EM) category. The MSCI index changes are widely watched by institutional investors and passive fund managers around the world. The increase in Pakistan's representation may not only lead to short-term capital inflows but also signal growing confidence in the country's economic and market fundamentals.
Mint
12-05-2025
- Business
- Mint
The US-UK trade deal: Theatrics took centrestage
Watching the President of the United States, Donald Trump, reveal in the Oval Office what he described as 'a tremendous trade deal" with the United Kingdom reminded me of the 1990s sitcom Seinfeld—it was a show that was literally about nothing. To be clear, it's not a deal. It's more of a framework for an agreement. In other words, US and UK negotiators still have a lot of work to do in coming weeks—perhaps months or even years like these things usually take—to hammer out the details. For now, the idea is to have the UK fast-track American goods through customs and reduce barriers on 'billions of dollars" of agricultural, chemical, energy and industrial exports, including beef and ethanol. Also Read: Nouriel Roubini: US economic tailwinds will help it overcome tariff headwinds More importantly, what was announced fails to accomplish any of the three objectives Trump originally put forward leading up to 2 April's 'Liberation Day' for levying tariffs on America's trade partners. As a refresher, the first was using tariffs (which Americans pay for) to raise tax revenue to help close the federal budget deficit and pay for an extension of the US Tax Cuts and Jobs Act of 2017 that is due to expire this year. The second was to bring manufacturing that migrated overseas back to the US, igniting a new 'Golden Age' of America. The third was to achieve foreign policy goals. None of those three objectives came up in last week's announcement. So, what is the point? Trump's trade war has upended the economy. The uncertainty he unleashed has paralysed businesses and caused measures of consumer confidence to collapse. Companies are openly warning of empty shelves coming sooner rather than later. Last Thursday, a monthly survey by the Federal Reserve Bank of New York showed that the outlook for inflation is soaring among households at the same time as they see future earnings growth slowing significantly. That's a recipe for stagflation. Also Read: Doom loop: Stagflation is the best scenario a tariff-hit US can expect The International Monetary Fund slashed its estimate for how much US gross domestic product will expand this year by 0.9 percentage point, the most of any major economy and a testament to just how much Trump's trade strategy is damaging the country. Little wonder why the Morgan Stanley Capital International (MSCI) US Index of equities has dropped 4.34% this year through last Wednesday while the MSCI All-Country World Index that excludes US equities has surged 9.65%. 'I view tariffs as extraordinarily regressive as a policy," Ken Griffin, the billionaire chief executive officer of Citadel and Republican donor said at the Milken Institute Global Conference this week. 'I actually think they're contrary to the promise that the president made to the American people." Sure, US stocks surged as much as 1.6% last Thursday, but that's more likely a reflection of the market realizing how little countries will have to give up to soften Trump's threatened tariffs. Indeed, as Bloomberg News noted, last Thursday's developments are a sign that Trump is seeking an off-ramp from his plan to raise US tariffs to their highest level in a century. 'Today's action also sets the tone for other trading partners to promote reciprocal trade with the United States," the White House said in its statement. Also Read: A trade war serves nobody: The US and China need to talk The problem for Trump is that America's trade partners have seen how quickly he will backtrack on his trade threats as more Americans sour on his handling of the economy, especially as he openly talks about households having to make sacrifices. 'Somebody said, 'Oh, the shelves, is it going to be open?' Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more than they would normally," Trump said during a 30 April US cabinet meeting. Telling Americans they have to tighten their belts is never a winning message for politicians. If Trump stuck to the three objectives initially laid out, all this would be understandable and maybe the economic pain a bit more tolerable. Trump has lately focused, however, on his stubborn belief that America's trade deficit is costing the country money. But as economists such as Nobel laureate Paul Krugman have pointed out, a trade deficit neither means trade is unfair nor that the country with the deficit is losing money. Instead, it is the flip side of large capital flows into the US, flows that help finance US debt and budget deficits. Trump sees it differently. When asked today about his trade war causing cargo ships to stop coming into West Coast ports, potentially costing dock-workers and truckers their jobs, Trump replied 'good," saying it means the US wouldn't be losing money. That sound like the perfect script for a Seinfeld reboot. ©Bloomberg The author is the executive editor of Bloomberg Opinion.
New Straits Times
11-05-2025
- Business
- New Straits Times
KLCI outperforms regional markets with 1.8pct April surge
KUALA LUMPUR: The Kuala Lumpur Composite Index (KLCI) climbed 1.8 per cent to reach 1,540 points in April 2025, outperforming both the Morgan Stanley Capital International (MSCI) Emerging Market Index and the MSCI All Country Asia ex-Japan Index. According to CGS International, within the Asean region, the KLCI outshone Singapore's Straits Times Index (STI), which was the only market to post a decline for the month, dropping 3.5 per cent month-on-month (MoM). Out of the 13 sectoral indices on Bursa Malaysia, five posted gains in April, with telecommunications, consumer, and healthcare emerging as the top three performers, recording MoM increases of 4.9 per cent, 4.2 per cent, and 3.4 per cent, respectively. In contrast, the energy sector was the weakest performer, slumping 9.2 per cent MoM, followed by transport and technology, which fell by 5.3 per cent and 4.7 per cent, respectively. "Out of the 30 KLCI companies, 20 posted share price gains in April 2025, with the three best performers on a mom basis being MR DIY Group (M) Bhd (19.1 per cent), Axiata Group Bhd (17.3 per cent), and Nestle (Malaysia) Bhd (17.1 per cent). "Notably, consumer and telco names made up eight of the top 10 gainers in the KLCI, which we think was due to the market shifting towards names with more domestic exposure that are relatively shielded from global uncertainties," it said. CGS International said Bursa Malaysia's average daily trading value dropped by 17.8 per cent month-on-month (MoM) to RM2.2 billion, while the average daily trading volume declined by 4.5 per cent MoM to three billion units. "We believe the stock market remained jittery and tentative in its trading in April, as President Donald Trump's Liberation Day tariff announcement on April 2 led to the market declining further before recovering as he subsequently announced a 90-day pause on additional tariffs above the baseline 10 per cent rate applicable to all countries. "This likely led to the mom decline in Bursa Malaysia's average trading value and volume, as investors stayed cautious amidst global geopolitics and economic uncertainties," it said. CGS International noted that the KLCI had a turbulent start to 2025, driven by external factors such as the US's restrictions on AI chips and newly re-elected President Trump's aggressive tariff measures. The firm acknowledged the ongoing macroeconomic uncertainties, highlighting that the unpredictability of US trade policy could negatively affect corporate earnings in Malaysia and weigh on overall market sentiment. "Our end-2025 KLCI target is 1,680 points," it added.
CNA
21-04-2025
- Business
- CNA
High chance of S Korean stocks joining developed market index: regulator
SEOUL :The vice chief of South Korea's financial regulatory agency said on Monday there is a high likelihood of the country's stock market being included in a key developed market index in the near future. "We see a very high possibility of being included soon, if not this time," Kim So-young, vice chairman of the Financial Services Commission, said at a press conference held in Seoul for foreign media. The stock market of Asia's fourth-largest economy is currently categorised as an emerging market by global index provider Morgan Stanley Capital International (MSCI), despite many other metrics indicating its developed-economy status. Last month, South Korea lifted a full market-wide ban on short selling of stocks for the first time in five years, which had been cited by foreign investors and MSCI as a major factor hindering market access. "More than 90 per cent (of the issues raised by MSCI) have been resolved," Kim said. He added that Chairman Kim Byoung-hwan would discuss recent improvements with foreign investors and the index provider during his visit to the U.S. this week. MSCI is scheduled to review its market classifications in June. Typically, the index provider places a market on a watch-list for a year or two before any reclassification. The administration of former President Yoon Suk Yeol introduced various measures in recent years to improve market access for foreigners and address the so-called "Korea Discount", which refers to the tendency for domestic stocks to be undervalued. Regarding a recent revision to the Commercial Act aimed at resolving the "Korea Discount", which was passed by parliament but vetoed, Kim said it was more desirable to amend the Capital Markets Act to minimise side effects. Earlier on Monday, South Korea's leading presidential candidate, Lee Jae-myung, pledged to revive legislation to curb abuses by controlling shareholders as part of a plan to bolster the stock market. Kim said the authorities were also reviewing regulatory improvements concerning share issuance, following a series of controversial capital-raising plans, including that of Hanwha Aerospace, which faced investor criticism.
