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Pakistan Strategy: Pak remains in MSCI EM; 2 additions and 2 deletions in Small caps

• MSCI has announced the results of the May 2020 Semi-Annual Index Review for the MSCI Equity Indexes. All changes will be made as of the close of May 29, 2020.
• From Pakistan’s viewpoint, there were no changes in the MSCI Pakistan Index under the MSCI Global Standard Indexes.
• There remain three constituents namely (1) Oil and Gas Development (OGDC), (2) MCB Bank (MCB) and (3) Habib Bank (HBL), in the main index. 
• However, following additions/deletions were made in the MSCI Pakistan Index under MSCI Global Small Cap Index:
• Additions: Mari Petroleum (MARI), Pakistan Petroleum (PPL)
• Deletions: Nishat Mills (NML), Sui Northern Gas Pipeline (SNGP)
• The total number of constituents from Pakistan under the MSCI Global Small Cap Index remain at 16.
• We estimate Pakistan’s weight is likely to be around 0.023%, which at the time of last rebalancing on Feb 12, 2020 was around 0.035%.
• The minimum criteria for EMs has been reduced to US$1,400mn total market cap (previously: US$1,532mn) and US$700mn float market cap (previously: US$766mn).
• The Index Continuity Rule remains for Pakistan (since May-2019), with Czech Republic, Egypt, and Peru added to the list.

MSCI states that such indexes may be discontinued if there are no constituents left in accordance with the MSCI GIMI methodology.