Pakistan’s weight in the MSCI Frontier Markets Index declined from 5.8% to 4.8% in the latest semi-annual review, reflecting weaker performance in the country’s listed companies compared to other frontier markets. Analysts said the decline mainly resulted from a nearly 13% fall in the market capitalisation of existing Pakistani companies included in the index.
According to analysis by Topline Securities, the overall market capitalisation of the frontier markets index increased by nearly 6% during the same review period. However, Pakistan’s comparatively weaker market performance reduced its overall representation in the benchmark index followed closely by international investors and fund managers.
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As part of the May 2026 review, MSCI added Habib Metro Bank to the main Pakistan index while removing Searle Pakistan Limited. Analysts explained that Habib Metro Bank secured inclusion after successfully meeting the required liquidity benchmark, known as the annualised traded value ratio used by MSCI for selection criteria.
Meanwhile, Searle Pakistan lost its position in the index after its free-float adjusted market capitalisation dropped below MSCI’s minimum eligibility threshold. The review showed that the required minimum free-float market capitalisation for May 2026 stood at approximately $116 million for companies seeking inclusion in the frontier markets index.
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According to the report, Searle Pakistan’s adjusted free-float market capitalisation declined to nearly $82 million by the end of April 2026, leading to its removal. In contrast, Habib Metro Bank’s adjusted free-float market capitalisation increased to around $129.5 million, comfortably exceeding the benchmark required for inclusion in the index review.
Analysts at Topline Securities said Habib Metro Bank had previously met the free-float requirements, but improved trading activity and stronger liquidity likely supported its latest entry into the MSCI Frontier Markets Index. Market experts believe index changes could influence foreign investor interest and portfolio allocations within Pakistan’s stock market in the coming months.