Pakistan is expected to enhance its standing in the MSCI Frontier Markets Index as the global benchmark provider prepares for its next review in November 2025. Market analysts anticipate the country will see an expansion in its listed company representation, signaling incremental progress in Pakistan’s market inclusion efforts.
Research from Topline Securities indicates that Fatima Fertilizer, Askari Bank, and Bank of Punjab are likely candidates for addition to the MSCI Frontier Markets Index. If these firms are included, Pakistan’s total number of securities in the index will increase from 27 to 30. This would lead to a marginal rise in Pakistan’s overall weight within the index, further solidifying its role among frontier market peers. The MSCI global index review is scheduled for November 5, 2025, with changes set to take effect on November 25, 2025.
Currently, Pakistan holds a weight of approximately 5.4 percent in the MSCI Frontier Markets Index. Fauji Fertilizer Company remains the largest contributor among Pakistani constituents, maintaining the highest individual weight from the country. This positioning underscores the continued relevance of Pakistan’s diversified corporate representation in key sectors, particularly fertilizers and banking.
Despite the anticipation surrounding new entries, the outlook includes potential removals. The Topline report highlights risk for Abbott Pakistan, which may face exclusion due to insufficient free float, while Bank Al Habib could also be removed if it fails to meet liquidity benchmarks. However, the application of MSCI’s buffer rules could shield both companies from immediate removal, providing room for compliance improvements before the effective date.
While these index adjustments are viewed as a positive signal for Pakistan’s equity market visibility, analysts maintain a cautious stance on foreign capital inflows. Frontier market funds continue to operate with relatively low asset bases, and several funds focused on frontier equities have already been shuttered. As a result, even with an increase in constituents, Pakistan is unlikely to see sizable investor inflows. The expected capital inflow tied to index adjustments is projected between USD 3 million and USD 5 million, underscoring limited short-term liquidity impacts from the potential reclassification shift.
In comparison, Pakistan has seen a relatively stronger improvement in the FTSE Frontier Market Index. The country’s weight in that benchmark climbed to 10 percent in September 2025. However, despite this substantial improvement, it has not translated into significant foreign investment inflows. Market participants note that global investor appetite for frontier markets remains muted, driven by macroeconomic uncertainties and a preference for more liquid emerging and developed markets.
Overall, Pakistan’s anticipated upgrades in global indices reflect incremental progress in market positioning. The adjustments may reinforce investor confidence over time but are unlikely to materially alter near-term capital dynamics. Market strategists emphasize that sustained policy stability, continued reform momentum, and improved market liquidity will play a more decisive role in reshaping Pakistan’s investment appeal than index rebalancing alone.
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