India’s Weight in MSCI Emerging Markets Index Nears China’s
India’s weight in the MSCI Emerging Markets Index has reached 19.9%, very close to China’s 24.42%, which has dropped from nearly 40% in 2020. The MSCI Emerging Markets Index includes large and mid-cap representation from 24 countries, covering approximately 85% of free float-adjusted market capitalization.
Top 5 Countries in the Index
As of August 2024, the top five countries in the MSCI Emerging Markets Index are:
| Country | Weightage |
|---|---|
| China | 24.42% |
| India | 19.9% |
| Taiwan | 18.77% |
| Korea | 11.67% |
| Brazil | 4.50% |
The remaining 19 countries account for 20.73% of the weightage.
Reasons for India’s Growth
India’s increasing weight in the index is due to its rapid economic development, particularly in the IT and telecommunications sectors. The country has a young and dynamic workforce, and its markets have shown strong resilience post-COVID, with the Nifty 50 index giving significant returns in recent years.
Impact of IPOs and SEBI Norms
Relaxed foreign ownership norms by SEBI and a surge in IPOs have also contributed to India’s higher weightage. In 2023, 243 companies launched IPOs, and many more are planned for 2024, including major companies like Hyundai Motor India, Swiggy, Zomato, and NTPC Green.
Doubts Revealed
MSCI Emerging Markets Index -: This is a list made by a company called MSCI that includes stocks from countries that are still growing and developing, like India and China.
Weight -: In this context, ‘weight’ means how important or big a country’s stocks are in the list. If a country has a higher weight, it means its stocks are more important in the list.
China’s 24.42% -: This means that China’s stocks make up 24.42% of the total value of all the stocks in the MSCI Emerging Markets Index.
24 countries -: The MSCI Emerging Markets Index includes stocks from 24 different countries that are still growing and developing.
Booming economy -: This means that India’s economy is growing very fast and doing very well.
IT and telecom sectors -: These are parts of the economy that deal with computers, software, and communication services like mobile phones and the internet.
Young workforce -: This means that many people working in India are young, which can help the economy grow because they have many years to work and contribute.
SEBI -: SEBI stands for Securities and Exchange Board of India. It is an organization that makes rules to protect people who invest money in the stock market.
Foreign ownership norms -: These are rules about how much of a company’s stock can be owned by people or companies from other countries.
IPOs -: IPO stands for Initial Public Offering. It is when a company sells its shares to the public for the first time to raise money.
