The MSCI Emerging Markets Index is an index that captures large and mid-cap representation across 24 countries classified as Emerging Markets. With 1,374 constituents, the index covers about 85% of the free float-adjusted market capitalization of each country. This index is important in tracking the performance of the crucial companies operating in rapidly growing economies.
Performance:
India’s weightage in MSCI benchmark India’s weightage in the MSCI Emerging Markets Index was affected due to controversy surrounding the Adani Group’s alleged involvement in stock manipulation and accounting fraud. India is currently ranked third with a weightage of 13%, trailing Taiwan, which is ranked second with a weightage of 14.2%. Currently, there are 8 Adani Group and Associates companies in the MSCI Standard Index.
Taiwan’s weightage in MSCI benchmark Taiwan’s weight in the MSCI Emerging Markets Index increased to 14.2% while India’s weightage fell to the third spot with 13%, according to data compiled by Bloomberg. In August 2022, India overtook Taiwan to claim the second spot. The controversy surrounding the Adani Group and subsequent meltdown in the stock market impacted India’s weightage in the MSCI Emerging Markets Index.
MSCI’s feedback on Adani Group Securities MSCI has sought feedback on Adani Group securities after a report by US-based investment research firm Hindenburg alleged stock manipulation and accounting fraud by the conglomerate. The index provider stated that it is aware of the reports published regarding the Adani Group and its associated securities.
India’s weightage decline India’s ranking on the MSCI Emerging Markets Index slipped following underperformance in January 2023 amid a decline in Adani Group shares. With a weightage of 12.97%, India is now ranked third after China and Taiwan with weights of 33.49% and 14.42% respectively. India had a weighting of 14.44% at the end of December 2022, taking the second place for the first time.
Reversal of Fortune:
In 2023, there has been a reversal of fortune, with MSCI India down 3% in January and MSCI EM up 8%. Within Emerging Markets, the MSCI Taiwan Index has been a sharp outperformer, surging nearly 13% last month. This is driven by a 16.4% rally in Taiwan Semiconductor Manufacturing Company (TSMC), which is around 45% of the MSCI Taiwan Index weight. On the other hand, MSCI India was down about 4% in January, with 1.7% due to a drop in Adani Group stocks.
The controversy surrounding the Adani Group and subsequent decline in Adani Group shares has impacted India’s weightage in the MSCI Emerging Markets Index. As of now, the weightage could consolidate around current levels. MSCI has sought feedback on Adani Group securities after a report of alleged stock manipulation and accounting fraud by the conglomerate.
