Pakistan’s stock market could attract bigger cash inflow than it can handle the day before MSCI Inc. restores the nation to emerging-market status.
About $500 million may gush into the nation’s equities on May 31, said Ali Khalpey, chief executive officer frontier markets at the Cairo-based investment bank.
Nevertheless, the one-day inflow, if it comes to pass, would compare with the $532 million Pakistan received in all of 2010. The benchmark KSE100 Index has risen 6.8 percent this month to a record.
“It’s a big number and there isn’t enough capacity in the system to handle the volume and value we expect,” Khalpey said. “We have worked with similar investors when Qatar and the United Arab Emirates were upgraded by MSCI. The flows won’t be staggered. Tracker funds have to execute on the day.”
Read more at Bloomberg.