Morgan Stanley Capital International Inc (MSCI) — the leading provider of equity, fixed income and hedge fund indices that are widely followed by fund managers and institutions across the world — is slated to increase India’s weightage when it announces the next quarterly revision in its indices for various markets on May 10.Analysts maintain that India deserves higher weightage in the revamped MSCI Asia index. ‘‘India’s total market cap has already crossed the $700 billion mark. India deserves more weightage,’’ said a fund manager.The inclusion of an Indian stock in the MSCI Asia Index will positively affect not only the foreign holding in that stock but also India’s weightage in the MSCI Asia Index (ex-Japan). ‘‘We have been mentioning that despite the fact that India’s market capitalisation is almost the same as that of Korea and Taiwan, the weightage of the latter countries in the MSCI Asia Index is almost double that of India,’’ said an analyst from Sharekhan.Countries with lower market cap are given more weightage in MSCI Asia Index. Taiwan has a market cap of $553 billion but it has a weightage of 19.7 per cent. Korea has a market cap of $745 billion but it has a weightage if 25.7 per cent. However, India, with a market cap of $700 billion, has a weightage of only 9.6 per cent.According to analysts, several stocks like Bharti Televentures, Reliance Communications, Suzlon Energy, NTPC, Siemens and Sterlite Industries are prime candidates for a place in MSCI Index. This is based on the free-float market capitalisation.As the flow of foreign funds into India also depends on India’s weightage in the regional indices, such as the MSCI Asia Index, any upward revision in India’s weightage in the MSCI Asia Index will boost foreign fund flows.
