MSCI adds three Pakistani cement stocks to Frontier Index

By Staff Reporter

KARACHI: MSCI Inc. will add three Pakistani cement companies, DG Khan Cement Co., Maple Leaf Cement Factory Ltd., and Fauji Cement Co, to its Frontier Markets Index on May 30, lifting the country’s constituents to 26 from 23 and potentially drawing more foreign cash into its equity market.

The decision, part of MSCI’s May 2025 review, underscores the rising clout of Pakistan’s cement sector in frontier markets. Minimum thresholds for inclusion rose to $78 million in free float and $155 million in total market cap, up from $72 million and $145 million in February.

Three stocks—Interloop Ltd., Searle Co. Ltd., and Abbott Laboratories Pakistan Ltd.—stay in the index despite missing the new $78 million free float mark, likely thanks to a buffer rule that allows some flexibility in maintaining index composition.

A similar precedent was set with TRG Pakistan Ltd., which was kept in the index in past reviews despite falling short of the threshold, only to be removed in subsequent updates.

Pakistan’s weight in the MSCI Frontier Markets Index is estimated at 6% to 6.5%, with the three new cement stocks contributing roughly 26 basis points to the total.

“Assuming $2-$3 billion in funds tracking the frontier market index globally, the inflows in these companies are estimated at $5 million to $8 million,” brokerage Topline Securities said in a market note.

Separately, MSCI adjusted its Small Cap Index, adding four Pakistani stocks: Archroma Pakistan Ltd. (ARPL), At-Tahur Ltd. (PREMA), Engro Polymer & Chemicals Ltd. (EPCL), and Pakistan Reinsurance Co. Ltd. (PAKRI).

DG Khan Cement was promoted from the Small Cap Index to the main Frontier Markets Index, while AGP Ltd. (AGP) and Agritech Ltd. (AGL) were dropped from the smaller-cap benchmark.