Emkay: Alternative Research: MSCI Rebalancing - Expected changes; announcement on 12th February, 2014
Rajesh Desai
MSCI quarterly rebalancing announcement is due on 12th February, 2014, effective from 3rd March, 2014. Based on our understanding of the MSCI Global Investable Market Indices Methodology, we have arrived at the following conclusion. The flows have been arrived assuming that MSCI Benchmarked ETFs make up around USD12 bn.
|
Stock |
Expectation |
Current Adjusted FIF |
Expected Adjusted FIF |
Expected Value (Mn INR) |
Expected Shares (Mn) |
10-day Avg Vol (Mn Shrs) |
10-day Del Vol (Mn Shrs) |
|
HCL Tech |
Weight Increase |
0.30 |
0.40 |
4320 |
3.26 |
1.21 |
0.69 |
|
Nestle |
Weight Increase |
0.12 |
0.24 |
3024 |
0.56 |
0.03 |
0.02 |
|
Kotak Bank |
Weight Decrease |
0.41 |
0.21 |
5472 |
7.69 |
0.98 |
0.61 |
|
Zee |
Exclusion |
0.25 |
0.00 |
3312 |
11.46 |
2.58 |
1.81 |
|
Lupin |
Exclusion |
0.08 |
0.00 |
1656 |
1.79 |
0.98 |
0.37 |
In case of Zee, the board have already approved an increase in the FII limit to 100% from 49% in its AGM held on 25th July, 2013. However, the RBI has yet to approve (notify) it. We have been calling the RBI regarding the status of the same. However, we are not able to get a confirmed statement for it. The MSCI has been taking the adjustment factor considering the FII limit to be 49%. We believe they will continue to do so and hence the stock will move out of the MSCI India portfolio.
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Thanks & Regards, |
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Emkay Equity Advisory | Emkay Global Financial Services Ltd. | www.emkayglobal.com |
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7th Floor, The Ruby, Senapati Bapat Marg, Dadar (W), Mumbai– 400 028| Board No.: +91-22-66121212 | Fax : +91 22-6612 1299
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CA. Rajesh Desai