Karachi: Pakistan's equities are set to gain increased traction within the MSCI Frontier Markets (FM) Index following recent adjustments announced by MSCI. As part of its November Review, MSCI has made changes to the MSCI Equity Indexes, which will be implemented by the close of November 25, 2024. A notable change includes the deletion of TRG from the MSCI FM Index, bringing the total number of scrips in the MSCI FM Pakistan Index to 20. However, the index's weight has been increased to 4.6%, signaling a more significant representation of Pakistan in the index.

According to AKD Securities Limited, the review also saw the addition of eight Pakistani securities and the removal of one from the MSCI FM Small Cap Index. This shift is expected to attract foreign investors to Pakistani equities, encouraged by monetary easing stemming from macroeconomic stability and a stable currency under the International Monetary Fund (IMF) program.

Despite the positive outlook, the development comes with certain challenges. The lower flows tracking FM markets and the possibility of prolonged higher interest rates in developed markets post-U.S. elections might pose hurdles. Nonetheless, the appealing valuation of Pakistani equities presents a compelling case for investment, offering potential opportunities for investors looking to capitalize on the country's economic stability and growth prospects.