FTSE Russell stated that Pakistan’s market did not meet the minimum securities count required to maintain its FM status. Despite this setback, there is still considerable optimism about the country’s equities. This year, stocks on the Pakistan Stock Exchange (PSX) have surged by over 30%, making them the best performers in Asia in US dollar terms. Market experts suggest that the downgrade to FM status was expected and has had little impact on market sentiment. Investors remain hopeful that long-term funding from the International Monetary Fund (IMF) will stabilize the economy and help Pakistan address its economic challenges.
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Pakistan previously lost its emerging-market status with MSCI Inc. in 2021, just four years after it was upgraded, due to its shrinking market size and liquidity.
FTSE Russell had placed Pakistan on its watch list for a potential downgrade to frontier market status in its September review, citing a steady decrease in its index weight and its “minimum investable market capitalization” falling below the required level.
