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Last Updated : Jul 18, 2019 05:01 PM IST | Source: Moneycontrol.com

MSCI EM index: 21 stocks to be in focus if Budget proposals see light of day

The investment bank expects India's weight to rise about 80bps to 9.6 percent

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If certain proposals in the Union Budget regarding the foreign investment limit in the listed companies are accepted and notified, India's weight in the MSCI Emerging Markets index may rise, a Morgan Stanley report said.

The investment bank expects India's weight to rise about 80bps to 9.6 percent.

In that case, the weight of as many as 21 stocks is likely to appreciate, according to Morgan Stanley. They include L&T, Bajaj Finance, Bajaj Finserv, Hero MotoCorp, Tata Steel, Bharti Infratel, Nestle India, Divi’s Laboratories and Titan Company, among others.

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Finance Minister Nirmala Sitharaman proposed to increase foreign investor's stake in a company to the respective sector's maximum foreign investment limit. The proposal also applies to public sector undertakings that are part of the MSCI Emerging Market Index.

Table: 17 of the 21 stocks that may see an increased weight in the Emerging Market Index after the proposals are implemented. 

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Public sector stocks that are part of the above list include HPCL, Petronet LNG, Container Corp and REC.

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The proposed changes could also lead to the inclusion of some other stocks in the index. From the BSE200 universe, they are Kotak Mahindra Bank, DLF, Bajaj Holdings, Colgate Palmolive India and ACC.

Morgan Stanley estimates $14.2 billion flow coming towards Indian markets, out of that $2.8 billion in passive flow. The remaining $11.4 billion reflects the assumption that active investors will keep their positions intact and therefore raise their overall position to reflect India's higher weight.

Disclaimer: The views and investment tips expressed by brokerages on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jul 18, 2019 05:01 pm
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