The Hindu Business Line : MSCI adds 8 stocks to India Index

Mumbai, Nov. 6 Morgan Stanley Capital International, which develops and maintains equity, hedge fund and REIT indices that serve as benchmark indices on a world wide basis, has announced changes to the MSCI Emerging Markets Asia Index in its November 2007 Semi-Annual Index Review.

The changes will take effect from November 30..

Business models

Accordingly, MSCI has included eight stocks and removed seven from its MSCI India Index.

The stocks included are Cairn India, DLF, GMR Infrastructure, HCL Technologies, NTPC, Reliance Natural Resources, Sterlite Industries and United Spirits.

“It heralds the maturity of some of the sectors and it does signify coming of age of business models of some of the asset heavy companies which have scaled high enough to be considered important on a regional basis also,” said Mr Sandeep Shenoy, Strategist, PINC Research. India’s weightage in MSCI Emerging market Asia Index has increased by 5 basis points to 7.16 per cent as MSCI Barra has included DLF and Sterlite Industries to the MSCI Emerging Markets (EM) Asia Index.

Dropped

Ashok Leyland, Asian Paints, Bharat Forge, GlaxoSmithKline Pharma, Hindustan Petroleum Corp Ltd, Nestle India and Videocon Industries Ltd have been dropped from the MSCI India Index.

“They have revived the portfolio and taken out stocks which are not very liquid and included some stocks which are included in Nifty and some which are representative of the infrastructure sector,” said Ms Shahina Mukadam, Head-Research, IDBI Capital Market Services. “Those companies which have been included in the index will definitely gain as funds that track that index will necessarily have to buy those scrips,” said an analyst with a Mumbai-based brokerage house.

DLF was up by 1.40 per cent on Tuesday, NTPC was up by 1.16 per cent, whereas RNRL dipped by 9.02 per cent and Cairn India was down by 1.58 per cent.

Growth monitor

“MSCI Index is highly used by many international players as a denominator of India’s economic growth and companies which represent the future growth story of India seem to have been included while all stocks which were earlier included but did not perform according to the mark have been excluded,” said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital markets Ltd.

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