ETAutoRelated
MUMBAI: Indian equities could see an inflow of about $ 2.5 billion or Rs 18,000 crore in November-December as global index provider MSCI has confirmed that it will implement the new regime on the foreign ownership limit (FOL) changes in the November Review. With the new changes MSCI India's weight in its emerging market index will increase to 8.7% from the current level of 8.1%.
MSCI on Monday said it welcomes the recent disclosure of the FOL for Indian securities by National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL) addressing the concerns on the timeliness, quality and standardization of the data. The changes in the constituents for the MSCI indices will take place from December 1,2020.
In July, MSCI had deferred the decision to implement the FOL till further notice. Stocks such as Asian Paints, Bajaj Finance, Britannia, L&T and Nestle are likely to get an inflow between $100 and $ 200 million while Kotak Mahindra Bank, PI Industries and IPCA Laboratories are likely to be included in the MSCI EM index, according to Morgan Stanley.
If included, Kotak Mahindra will likely see an inflow of $ 502 million while IPCA Laboratories and PI Industries are expected to get about $100 each. These stocks may remain under foreign fund manager’s radar over the coming weeks, which may give near-term appreciation in share prices.
On April 1 this year, India entered into a new regime on foreign limits where it increased the foreign portfolio investment (FPI) limits to sector foreign limits. Following that move, both NSDL and CDSL have revised foreign portfolio investment (FPI) limits for all listed stocks.
The MSCI index is a widely-tracked index for Indian stocks overseas with several passive funds replicating their portfolios according to the stock weightages that the index carries. These funds will be forced to buy or sell the stocks if the weight in the index is increased or reduced in the benchmark.
MSCI on Monday said it welcomes the recent disclosure of the FOL for Indian securities by National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL) addressing the concerns on the timeliness, quality and standardization of the data. The changes in the constituents for the MSCI indices will take place from December 1,2020.
In July, MSCI had deferred the decision to implement the FOL till further notice. Stocks such as Asian Paints, Bajaj Finance, Britannia, L&T and Nestle are likely to get an inflow between $100 and $ 200 million while Kotak Mahindra Bank, PI Industries and IPCA Laboratories are likely to be included in the MSCI EM index, according to Morgan Stanley.
If included, Kotak Mahindra will likely see an inflow of $ 502 million while IPCA Laboratories and PI Industries are expected to get about $100 each. These stocks may remain under foreign fund manager’s radar over the coming weeks, which may give near-term appreciation in share prices.
On April 1 this year, India entered into a new regime on foreign limits where it increased the foreign portfolio investment (FPI) limits to sector foreign limits. Following that move, both NSDL and CDSL have revised foreign portfolio investment (FPI) limits for all listed stocks.
The MSCI index is a widely-tracked index for Indian stocks overseas with several passive funds replicating their portfolios according to the stock weightages that the index carries. These funds will be forced to buy or sell the stocks if the weight in the index is increased or reduced in the benchmark.
Read More News on
Download The Economic Times News App to get Daily Market Updates & Live Business News.