Index provider MSCI’s quarterly rebalancing exercise in May could see 17 Indian companies, including PB Fintech and Sundram Finance, making it to the MSCI Global Standard index from MSCI, leading to potential inflows of $3.28 billion, according to IIFL Alternative Research.
PB Fintech and Sundram Finance are expected to see maximum inflows of $250.46 million and $233.24 million, respectively. Apart from this, Zydus Lifesciences, Mankind Pharma, Jindal Stainless, Phoenix Mills and Torrent Power are some other major additions from India expected in the MSCI Global Standard index.
Sriram Velayudhan, senior vice president alternative research at IIFL Institutional Equities, said the May MSCI review is turning out to be a big one for India as numbers and estimates stack up right now. 展e have nearly 14 names that are fulfilling eligibility requirements and three of them almost near to the threshold of qualifying,Velayudhan said.
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MSCI will announce the changes to its index on May 13, and the adjustments will come into effect on May 31. MSCI rebalances its major indices four times a year, and the previous review was done in February. Many global investors follow the MSCI indices for their investments, and a stock’s addition to MSCI indices leads to inflows from these investors on the effective date.
While 17 stocks are expected to make it to the MSCI Global Standard index, One97 Communications is expected to be removed. This could lead to potential outflows of $90 million from shares of the Paytm痴 parent company, IIFL data showed.
The anticipated addition or removal from MSCI indices usually draws retail investors to place their bets in these companies ahead of the announcement. Velayudhan said investors should exercise caution while making these speculative trades as there have been instances of potential names failing to make it to the list either owing to excess positioning or fundamental news flows.
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