Morgan Stanley Capital International (MSCI) on Friday added 12 new scrips and dropped one from the MSCI India Index. This is for the first time that so many Indian stocks made their way into the index.
Following this, India's MSCI weight in emerging markets Asia has gone up marginally to 5.42 per cent from 5.41 per cent.
The list of new entries into the index includes Jet Airways, Nicholas Piramal, Arvind Mills, Bharat Electronics Ltd, Bharta Forge, Biocon, M&M, UTI Bank, Kotak Mahindra Bank, JSPL, Glenmark, Reliance Energy and Matrix Labs. Punjab Tractors has been removed from MSCI India Index.
These changes will come into effect from close to May 31, 2005. Infosys Technologies tops the chart in MSCI India index, commanding a weightage of 13.3 per cent, followed by Reliance Industries at 11.9 per cent, ICICI Bank at 6.5 per cent, ONGC at 5.4 per cent and HDFC 5.1 per cent. MSCI added 113 Asia-Pacific stocks to world indices and removed 16 Asia-Pacific stocks from world indices.
Andrew Holland, chief administrative officer and vice-president research, DSP Merill Lynch, said: 'India's weightage has gone up by just 0.01 per cent. We need to check how much will be the wieghtage of the companies that have been added.'
A fund manager with a brokerage said the addition of so many stocks at one go reflects the changing reality of the stocks being traded in the equity market in India
Asian companies account for two-fifths of MSCI's 278 additions worldwide, the maximum from any region, MSCI said in a statement on its web site.
The changes follow an annual review and will likely to prompt $3 trillion of funds that track the indexes to make similar changes.
'The objective of the Annual Full Country Index Review is a systematic re-assessment of the various dimensions of the equity universe, whereby securities may be added to or deleted from the MSCI Standard Index Series in order for each country index to be as close as possible to the 85 per cent free float-adjusted market capitalisation representation target at the industry group level,' the statement said.
