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Nuvama Alternative & Quantitative Research highlighted the high conviction inclusions and exclusion for the upcoming review of the MSCI global standard index. The global index provider MSCI (Morgan Stanley Capital International) rebalances its indices semi-annually and quarterly. The announcement date is expected to be on Friday, February 10, 2023 whereas adjustment date on Tuesday, February 28, 2023.

The brokerage and research firm's analysis and final predictions suggest that Bank of Baroda and CG Power could be two stocks that may see the possible inclusions in the index review whereas Biocon could see the exclusion in the February 2023 Rejig.

Bank of Baroda shares have surged over 94% in a year's period whereas that of CG Power and Industrial Solutions Ltd have gained more than 80% during the period on the BSE. On the other hand, pharma major Biocon's shares have declined about 34% in a year.

The Index provider can select any single day for the MSCI cut-off date from the last ten working days of January. As observed by Nuvama in the last 10 reviews, MSCI has always selected the day from initial four working days (from the last ten days). Thus, the brokerage believes the market cap cut-off date is already done or be maximum by Monday, January 23, 2023.

“We were pushing Power Finance (POWF) as a probable inclusion contender since INR 140 odd levels. However, stock after touching 162 has recently cooled off and is trading at INR 150 levels. Thus, as per my calculations, if the cut-off date has already been selected, the stock has missed a chance for Feb review. POWF can be kept on long side from May 2023 review inclusion," said Nuvama.  

To be eligible for inclusion in a MSCI index, a leading provider of research-based indexes and analytics, a security’s Foreign Inclusion Factor (FIF) must reach a certain threshold. The FIF of a security is defined as the proportion of shares outstanding that is available for purchase in the public equity markets by international investors.

The views and recommendations made above are those of individual analysts or broking company, and not of Mint.

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