Morgan Stanley Capital International (MSCI) has announced changes to its Frontier Markets indexes as part of the May 2026 review, adding one Pakistani company to the MSCI Frontier Markets Index and three companies to the Frontier Markets Small Cap Index.
According to MSCI’s latest review, Habib Metro Bank has been added to the MSCI Frontier Markets Index, while The Searle Company Limited has been removed from the standard Frontier Markets Index.
The revised changes will take effect after the market closes on May 29, 2026.
Three Pakistani Companies Added to Small Cap Index
MSCI also announced additions to its Frontier Markets Small Cap Index. The Pakistani companies included in the small cap category are:
Crescent Textile Mills
Highnoon Laboratories
The Searle Company Limited
Meanwhile, Murree Brewery has been removed from the MSCI Frontier Markets Small Cap Index.
The MSCI Frontier Markets Index tracks large and mid-cap companies across frontier economies and covers nearly 85% of the free float-adjusted market capitalization in each participating country.
Pakistan Market Shows Strong Performance
Brokerage house Arif Habib Limited stated in a market note that Pakistan’s stock market has outperformed the MSCI Frontier Markets Index by 4.1% during FY26 to date.
The firm further estimated that Pakistan’s weight in the MSCI Frontier Markets standard index is expected to stand around 5.8% following the latest review adjustments.
Market analysts believe inclusion in MSCI indexes can improve international investor visibility and attract foreign portfolio inflows into Pakistan’s equity market.
Pakistan’s MSCI Journey
Pakistan was downgraded from Emerging Market status back to Frontier Market status by MSCI in September 2021, slightly more than four years after it had been upgraded.
At the time, MSCI stated that while Pakistan continued to meet accessibility requirements for Emerging Markets, the country no longer fulfilled the necessary standards related to market size and liquidity.
The downgrade had impacted foreign investor participation and reduced Pakistan’s weighting in global benchmark indexes.
However, analysts say recent market stability, improving macroeconomic indicators, and stronger stock market performance could help improve Pakistan’s standing among frontier market investors.
The latest MSCI review is being closely watched by investors, fund managers, and brokerage firms, as index inclusion often influences capital flows and investment strategies in emerging and frontier economies.