Momentum Builds for Pakistan’s Return to MSCI Emerging Market Index

Karachi: Pakistan is on the verge of making a comeback to the MSCI Emerging Market Index, according to a recent analysis by AKD Securities Limited. The report highlights the potential inclusion of seven Pakistani stocks that are likely to meet the MSCI Emerging Market criteria, driven by favorable economic conditions and market performance.

In a review conducted in May, MSCI added 12 securities to its index, with three of these additions originating from Pakistan. However, the weight of Pakistani stocks in the Frontier Market Index experienced a decline, dropping by 54 basis points compared to January 2025. This decrease is attributed to the negative performance of the KSE-100 Index, which has been affected by tensions between Pakistan and India.

Despite these challenges, there is optimism surrounding the future of the KSE-100 Index. Analysts expect a continued rally in the index, supported by a ceasefire agreement with India, ongoing monetary easing, and a relatively stable currency. The stability of the currency is being bolstered by a strong external position under the International Monetary Fund program.

The report by AKD Securities Limited suggests that, given the current trajectory, Pakistani equities could soon become part of the MSCI Emerging Market Index. This development would mark a significant milestone for Pakistan’s financial markets, potentially attracting increased foreign investment and enhancing the country’s economic outlook.