Investors chase new arrivals on MSCI

Investors lapped up shares of companies that would be included in the MSCI indices from Tuesday on hopes that these shares will give better returns in the short term. Shortterm investors with high-risk appetite can buy these stocks for quick gains while long-term investors need to look at the earnings growth potential before taking an investment call, said brokers. While Sequent Scientifi c, a mid-cap pharmaceutical company, rallied 9.53 per cent to close at Rs 1057.75, Welspun Corp gained nearly 9 per cent to end the day at Rs 117. Ricoh India, Indo Count Industries, Escorts and HSIL rose by 6 per cent. These stocks will be included in MSCI Smallcap indices effective from December 1. In comparison, the BSE Sensex and Midcap indeces gained 0.07 per cent and 0.05 per cent, respectively.

“The initial euphoria in these stocks is due to the demand that will come from the fund managers who track MSCI indices,” said Ajay Bodke, head investment strategy & advisory, Prabhudas Lilladher. “However, once the portfolio balance is over, the movement of the stocks would be based on their fundamental performance”.

On November 12, MSCI said 24 companies have been included in the MSCI India Smallcap index while excluding 12 stocks. On the other hand, stocks that have been excluded from the MSCI indices declined sharply on the bourses.