MSCI EM index: Banking is the dominant sector in emerging markets

Banking is the dominant sector in emerging markets. For 19 of the 28 countries in the MSCI EM (Asia Pacific, excluding Japan) Index, nearly a third of their market is dominated by the banking sector. For six countries, including Egypt and Pakistan, the weight of the sector is more than half. In India, the weight of the sector is relatively moderate at 21 per cent. 

Over a fifth of the inflows, on account of exchange traded funds (ETFs) tracking the MSCI EM index, are pumped into banking stocks. According to industry estimates, ETFs with assets of around $100 billion track the