MSCI announces tomorrow: $1 billion inflows expected, focus on 5 PSU stocks

Global index services provider MSCI is expected to announce its quarterly rebalancing tomorrow, which could result in inflows of around $800 million to $1 billion from passive FII funds. Nuvama expects five PSU stocks to be included in the MSCI Global Standard Index – NMDC, Punjab National Bank (PNB), BHEL, Union Bank of India and NHPC.

“India currently holds around 17.8 per cent share in the MSCI EM index and we expect India’s share to move to around 18.5 per cent after the February rebalancing,” said Abhilash Pagaria of Nuvama Alternative & Quantitative Research.

This incorporation will result in an inflow of approximately $186 million to NMDC, $180 million to PNB, $156 million to BHEL, $140 million to Union Bank, and $223 million to NHPC. You can.

If DII inflows continue and steady FII participation resumes, India is likely to surpass the 20% weighting in the MSCI EM Index by early 2024.

The number of Indian stocks included in the MSCI Standard indices in 2023 has increased to 131, with a net inclusion of 17 Indian stocks in the last four reviews. “This is an improvement over 2022, which included only nine Indian stocks. Notable factors contributing to this increase in 2023 include India’s significant rally compared to other emerging markets and the quarterly rebalancing of MSCI’s semi-annual rebalancing of stock inclusions. Includes/excludes transition to star realignment.” Pagaria said.

Stocks that may be included in the MSCI Smallcap index include IREDA, Mamaearth, RR Kabel, SpiceJet, Inox Wind, Balmer Lawrie, Ethos, MSTC and DB Realty. MSCI is expected to announce its February 2024 rebalance tomorrow, but the adjustment has been confirmed. February 29, 2024.

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