India’s Weight on MSCI Equity Index Hits Record High In August Rejig

Morgan Stanley Capital International is the primary name of MSCI. This investment research company offers institutional investors and hedge funds stock indexes, portfolio risk and performance analytics, and governance tools. The benchmark indexes that MSCI is most well-known for are the MSCI Frontier Markets Index and the MSCI Emerging Markets Index. Every year, the company keeps releasing new indexes. Probably the most well-known product of MSCI are its stock indexes, which concentrate on various regions and stock categories, including small-, mid-, and large-cap stocks. They serve as the foundation for exchange-traded funds (ETFs) and monitor the performance of the stocks that are part of them. $15.6 trillion in assets under management (AUM) benchmarked to the company’s indexes as of December 31, 2023.MSCI provides access to over 280,000 indexes.

The Emerging Markets Index, Frontier Markets Index, All Country World Index, and EAFE Index are a few of the most popular ones. A market capitalization-weighted index that evaluates performance in both developed and emerging markets is the MSCI All Country World Index.

An organization called Morgan Stanley Capital International, or MSCI, offers investors investment data and analytics services. It was formed in 1986 when Morgan Stanley acquired the licensing rights to data from Capital International. As market benchmarks, mutual funds, exchange-traded funds, and individual investors use MSCI’s stock indexes, which are widely recognized. Several MSCI indexes that cover emerging, frontier, developed, and global markets are used to monitor the world economy.

India’s weightage increased:

India has narrowed the gap with China on the key MSCI index. China’s weightage on the index will decrease to 20.2% from 25%, while India’s weight will increase to 19.8% from 19.2%. The adjustments in the index weights will be implemented after markets close on Aug. 30, 2024. India’s weight may surpass 20% by the end of November, indicating that India is going head-to-head with China, according to the current records from MSCI. This change is expected to result in approximately $2.7 billion–$3 billion inflows into India.

List of stocks in the MSCI index:

The report states that an increase in the weightage of HDFC Bank, the largest stock in the benchmark NSE Nifty 50 and the leading private lender in India, could result in inflows of up to $1.8 billion.

A decrease in the weighting of Maruti Suzuki India, LTIMindtree, Ambuja Cements, Adani Enterprises, Yes Bank, and SRF will occur, while an increase in the weighting of Bharti Airtel, Coal India and Mphasis are forecast for the index. Bandhan Bank will not be included in the MSCI Emerging Markets index; instead, Dixon Technologies, Vodafone Idea, Oil India, Zydus Lifesciences, Rail Vikas Nigam, Prestige Estates Project, and Oracle Financial Services will be added. The MSCI India Small-Cap index will gain about 25 new stocks. 

Conclusion: As per MSCI’s recent analysis, there appears to be greater potential for growth in the Indian stock market compared to China.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.