MSCI Adds Faysal Bank to Frontier Index in 2025
Staff Report
Islamabad: MSCI has announced its August 2025 Index Review, adding one new Pakistan stock — Faysal Bank Limited (FABL) — to the MSCI Frontier Market Index.
This increases the total number of constituents in the MSCI Frontier Index to 27 from the earlier 26. The changes will take effect at the close of trading on August 26, 2025.Pakistan Stock Market Hits Historic High as Investor Optimism Grows
Currency Converter
According to details on the MSCI website, the minimum free-float market capitalization and total market capitalization thresholds for inclusion in the Frontier Market Index in August 2025 were set at US$90 million and US$181 million, respectively — about 15–17% higher than the May 2025 review, aligning with overall frontier market performance.
Since the last MSCI review, Pakistan’s market has outperformed the benchmark frontier index, delivering a total USD return of 24% during May–July 2025, compared with 20.4% for the MSCI Frontier Markets Index.
Among existing constituents, three stocks — International Industries Limited (ILP), Abbott Laboratories Pakistan (ABOTT), and The Searle Company Limited (SEARL) — have been retained despite failing to meet the free-float criteria for the second consecutive review, likely under MSCI’s buffer rule. In the past, TRG Pakistan was also retained under similar conditions before its eventual removal in a subsequent review.
Pakistan Weight at 6–6.5%
Pakistan’s estimated weight in the MSCI Frontier Market Index is around 6–6.5%, with FABL’s inclusion adding approximately 8 basis points.
Inflow Estimates
The addition of FABL is expected to represent 8 basis points of the index. With US$2–3 billion in global funds tracking the frontier market index, estimated passive inflows into FABL are around US$1.5–2.3 million. However, as Pakistan is currently not included in any major passive fund portfolios, MSCI-based trading activity may remain limited.
MSCI Small Cap Changes
In the MSCI Small Cap Index, two Pakistani stocks — Indus Dyeing (IDYM) and Jubilee General Insurance (JGICL) — have been added, while two others — Habib Sugar Mills (HABSM) and Octopus Digital (OCTOPUS) — have been removed.
