Morgan Stanley Capital International (MSCI) Inc., a leading provider of critical decision support tools and services, has unveiled its May 2025 Index review, adding three new companies from Pakistan to the Frontier Market Index—DG Khan Cement (DGKC), Maple Leaf Cement (MLCF) and Fauji Cement (FCCL).
The addition takes the total number of constituents in the MSCI Frontier Index from 23 to 26, with the changes to go into effect from May 30, 2025. Topline Securities estimates that Pakistan’s weight in the Frontier Market Index is now close to 6-6.5%.
Topline said the addition of the three cement companies constitutes a weight of 26 basis points. “Assuming $2 billion to $3 billion funds tracking frontier market index globally, the inflows in these companies are estimated around $5-8 million,” it added.
According to the MSCI website, the minimum threshold of free float and total market cap for the selection of frontier market stocks was $78 million and $155 million, respectively. In its last review in February 2025, it was $72 million and $145 million, respectively.
Topline has noted that Interloop, Searle Limited and Abbott Laboratories are retained in the index despite not meeting the free float threshold of $78 million, on the basis of the buffer rule. It recalled that in the past TRG was retained despite not meeting the threshold, but was eventually removed in subsequent reviews.
The MSCI Frontier Markets Small Cap Indexes has added four Pakistani securities—Archroma Pakistan, At-Tahur, Engro Polymer and Chemicals and Pakistan Reinsurance. It has moved one stock to the main index, i.e. DG Khan Cement, and deleted two, namely AGP Pharma and Agritech Limited.