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MSCI rebalancing: Biocon, Ipca Labs among 7 potential candidates for inclusion

In April, MSCI announced that it will not consider the sectoral cap applied to FOL (foreign ownership limit) for May rebalancing after the revisions made by Indian depositories as of April 1, 2020.

April 30, 2020 / 01:20 PM IST
 
 
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Tata Consumer, Torrent Pharma, Jubilant FoodWorks, Biocon, Alkem Labs, Ipca Labs and Indraprastha Gas are the potential candidates for inclusion in the MSCI semi-annual index rebalancing.

As per a report by the brokerage firm Emkay Global Financial Services, the MSCI May 2020 semi-annual index rebalancing may see the inclusion of the above stocks, while Bharti Infratel, Shriram Transport, Mahindra & Mahindra Financial Services, and Tata Power may see exclusion.

"Indraprastha Gas will have an adjustment factor of 0.5 upon inclusion on account of lower foreign investment headroom of merely 18 percent. Therefore, its inclusion has a lower probability," said Emkay.

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As per the brokerage report, the cut-off date for index rebalancing was April 24, 2020, while the expected announcement date is May 12, 2020. The date of rebalancing will be June 1, 2020.

A net inflow of nearly $246 million is expected due to the rebalancing in May in benchmarked funds.

In April, MSCI announced that it will not consider the sectoral cap applied to FOL (foreign ownership limit) for May rebalancing after the revisions made by Indian depositories as of April 1, 2020. This leads to FOL being unchanged for rebalancing in May 2020, said Emkay Global.

Earlier, Morgan Stanley in a report authored by Ridham Desai, and Sheela Rathi had said that India’s weight is likely to increase in the emerging market index.

From April 1, 2020, India moved into a new regime on foreign limits whereby the FPI limit has been increased to the sector foreign limit.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Apr 30, 2020 01:20 pm

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