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TVS Motor Co, Varun Beverages, Tube Investments of India, Indian Hotels Co, Bajaj Holdings and Investment, and ABB India are the six Indian stocks that have been the latest inclusions in the MSCI's global standard index. The November rejig is applicable from today i.e., Wednesday, November 30, 2022.

Nuvama Alternative & Quant Research has analyzed the most recent four semi-annual reviews (May-22, Nov-21, May-21 and Nov-20) and it said that “it is evident that on adjustment day, 52% of the time fresh inclusion names have settled flat while 48% of the time they have closed in red indicating the higher rebalance volume is matched by the sell flow of event traders and long only fund managers."

The stocks largely languish or lower single digit gains during announcement date and from announcement date to adjustment date stocks languish or can trade with minor losses. On adjustment day, 52% of the time stocks have settled flat while 48% of the time they have closed in red indicating the higher rebalance volume is matched by the sell flow of hedge fund and event traders, it added.

“One month and two months after the rebalance, on an average, 60% of the times stocks have settled with losses. Baring Adani Group of stocks, most of the other inclusion names have traded in a narrow range up until six months post-rebalance. It is quite evident that most of the gains can only be made through pre-emptive bets, while post-announcement until the next few months, the stocks tend to languish or trade under pressure," as per the analysis by the Nuvama research team.

The global index provider MSCI (Morgan Stanley Capital International) rebalances its indices semi-annually and quarterly. The adjustment for its November semi-annual index rebalancing will take place on November 30, 2021 and the rejig will be with effect from December 1.

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

 

 

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