China-A MSCI inclusion: Modest impact on India might lead to a $214-mn outflow

India to see one of the largest dilutions in weights in the MSCI EM, MSCI Asia ex-Japan indices

The world’s largest index provider MSCI’s decision to include mainland China stocks (known as China A-shares) in its world indices will cost other emerging markets (EM).

However, the impact will be modest, says the brokerage. India and others will have to make way for inclusion of China A-shares in MSCI’s flagship EM index. 
 

Although the move is symbolically important for China, MSCI has only assigned weightage of just 0.73 per cent to the 222 China A-shares in the MSCI EM Index. Brokerage firm CLSA India’s weight in MSCI EM index will reduce by only seven basis points (bps) from 8.85