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MSCI cuts India weightage further

Our Bureau

MUMBAI, April 12

MORGAN Stanley Capital International (MSCI) on Friday further reduced India's weightage in the emerging markets free (EMF) index. The weightage has come down from 5.55 per cent to 3.93 per cent.

The cut in the weightage has been on account of MSCI moving to the free float last year. Under the new free float index methodology, higher the floating stock of a company's shares, the higher is the weightage assigned.

However, the reduction in the weightage, did not have any impact on the stock prices. BSE sensex closed 13 points higher.

"Foreign portfolio investors who invest in Indian stocks are not giving too much weightage to MSCI index now. Most of them resort to stock-specific investment,'' a stock dealer said

A dealer said the weightage did not fall as much as had been expected earlier.

In a statement from Geneva, the MSCI said the largest decrease in country's weight in the MSCI EMF index would be in the MSCI India Index with a fall in weightage by 1.62 per cent.

This is followed by Mexico (down 1.59 per cent), Malaysia (1.42 per cent). While the highest increase in the weightage is for South Africa with a rise of 2.03 per cent followed by Korea (1.81 per cent) and Taiwan (up 0.71 per cent).

The revised index comes into effect from May 31, 2002.

In the MSCI India Index, the highest increase in the weight is of HDFC Bank with foreign inclusion factor (FIF) of 0.53. Others with higher weightage includes — HFCL (FIF of 0.74 per cent), Reliance Petroleum (FIF of 0.25).

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