Ba­jaj Fin, In­dusInd Likely to Get Berth in MSCI In­dia

Among other key con­tenders, 1,000 crore of for­eign money may flow into these stocks

The Economic Times - - Companies: Pursuit Of Profit -

Mum­bai: Ti­tan Com­pany, Ba­jaj Fi­nance, Petronet LNG, In­dusInd Bank and In­dian Oil Cor­po­ra­tion are emerg­ing as key con­tenders for po­si­tions in the MSCI In­dia in­dex — an emerg­ing mar­ket in­dex widely tracked by global funds.

The next quar­terly tweak­ing of the MSCI In­dia in­dex will be an­nounced on May 12 which will ef­fec­tive from June 1, 2016. An in­clu­sion in the MSCI In­dia in­dex would mean that sev­eral pas­sive funds will de­ploy funds in pro­por­tion to the weigh­tage as­signed to the stocks in the MSCI in­dex.

“Shares such as Ba­jaj Fi­nance, In­dusInd Bank, Petronet LNG and In­dian Oil Cor­po­ra­tion have large in­vestor in­ter­est, while some these stocks are look­ing at­trac­tive on fun­da­men­tal ba­sis,” said AK Prab­hakar, head of re­search at IDBI Cap­i­tal. “We have ‘out­per­form’ rat­ing on In­dusInd Bank and have price tar­get of ₹ 1258 – 1400 in the medium term. For Petronet LNG, we ex­pect the stock to rise to ₹ 290.”

Shares of Ba­jaj Fi­nance have risen about 75% in past one year, while In­dusInd Bank has gained 27%. Both these stocks have out­per­formed the ET Bank In­dex which has risen 18% over the same pe­riod. Petronet LNG has surged 55% over past 12 months and In­dian Oil Cor­po­ra­tion has gained 29%. Both these stocks have out­per­formed the ET Oil & Gas in­dex that has gained 12.7%. Exchange traded funds (ETFs) cre­ate their port­fo­lios as per the weigh­tages of stocks in the MSCI indices. One of the ma­jor fol­low­ers of the MSCI in­dex is iShare’s MSCI In­dia ETF which has net as­sets of al­most $3.5 bil­lion as on April 25, 2016. Apart from iShares, there are many other global funds that fol­low the MSCI. An­a­lysts es­ti­mates nearly ₹ 1,000 crore of ad­di­tional for­eign fund flows into these com­pa­nies. “We ex­pect some of the com­mod­ity and con­sump­tion names to feature in MSCI In­dia in­dex,” said Pankaj Pandey head of re­search at ICICI Di­rect. “We ex­pect some for­eign funds to chase stocks in com­mod­ity and con­sump­tion names go­ing ahead.” The MSCI In­dia in­dex is de­signed to mea­sure the per­for­mance of the large-cap and mid-cap seg­ments of the In­dian mar­ket. Cur­rently, there are 73 con­stituents in the in­dex that cov­ers ap­prox­i­mately 85% of the In­dian eq­uity uni­verse.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.