Pakistani Capital Market is likely to reclassified into Frontier Markets and downgraded by one notch.
Tariq Iqbal Khan, Chairman Audit Oversight Board has said the decision will the impact the flow of investments into our Market.
Emerging Markets is a basket which is used by big funds and international financial institutions, the Change which is expected from September 7, 2021 may result into outflows at a large quantum.
A Senior Market Player has said that news had came in the media at midnight and neither PSX nor SECP issued any communiques before the market and brokerage houses also shared this news after the close of first seasion, which resulted into massive buying by innocent investors.
It is likely that a downgrade may come into force November this year. Large funds would start steady offloading and market may fall slowly and steadily.
Currently the Pakistan weighted @0.2%, the downgrading would enhance this weight by 10 times which is good in the longer run as Pakistan shall be big fish of small pond.