Kotak Mahindra Bank’s addition to MSCI EM index may lead to $502 million inflows1 min read . Updated: 11 Nov 2020, 01:28 PM IST
- Kotak Mahindra Bank will be the largest beneficiary as it is one the three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization
MSCI will add 12 Indian stocks to its global standard indices and remove two others, as a part of its November 2020 Semi-Annual Index Review. The world's largest index compiler has also made changes in other indices including MSCI Emerging Markets (EM) Index. All changes will be implemented as of close of 30 November 2020.
In India, Kotak Mahindra Bank will be the largest beneficiary as it is one the three largest additions to the MSCI Emerging Markets Index measured by full company market capitalization. The other two stocks which will be added to the MSCI Emerging Markets Index are Beigene Adr (Cn) and Smoore International both from China.
According to Morgan Stanley’s estimates, Kotak Mahindra Bank’s addition to the index may result in inflows of $502 million.
Surprisingly, Yes Bank has also been added to the MSCI India Index. Other additions to the index include, ACC, Adani Green Energy, Apollo Hospitals, Balkrishna Industries, IPCA Laboratories, Larsen and Toubro, MRF, Muthoot Finance, PI Industries and Trent.
Morgan Stanley estimates inclusion of Larsen and Toubro to fetch $139 million, Apollo Hospitals ($135 million),PI Industries ($99 million), Muthoot Finance ($81 million) and Ipca Laboratories ($102 million).
Bosch and LIC Housing Finance are only two stocks which are deleted from the MSCI India Index.
Meanwhile, 18 stocks were added in MSCI India Domestic Small Cap Index and seven were removed from it.
As previously announced, the MSCI Kuwait Indexes will be reclassified to Emerging Markets from Frontier Markets in one step as part of the November 2020 Semi-Annual Index Review (SAIR). The MSCI Kuwait Indexes will converge with the MSCI Provisional Kuwait Indexes, which were rebalanced using Emerging Markets size and liquidity requirements, and will be added to the MSCI Emerging Markets Indexes effective 1 December. MSCI will apply a Limited Investability Factor (LIF) on securities in the equity universe of Bangladesh, Lebanon and Nigeria with the objective of keeping their weights unchanged in the MSCI Frontier Markets Index as of the price cutoff date for the November 2020 SAIR.