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India Seeks Higher Weighting in MSCI Equity Indexes, Report Says

A team led by Modi’s principal economic adviser Sanjeev Sanyal is in discussions with MSCI Inc.

India Seeks Higher Weighting in MSCI Equity Indexes, Report Says
The Bombay Stock Exchange (BSE) logo is displayed in front of a bronze bull statue at the Bombay Stock Exchange in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

(Bloomberg) -- India thinks its stocks aren’t fairly represented in several MSCI gauges that are closely tracked by investors around the world. The nation is seeking a review, The Economic Times reported Monday.

A team led by Prime Minister Narendra Modi’s principal economic adviser Sanjeev Sanyal is in discussions with MSCI Inc. since February to push for higher benchmark weighting for Indian stocks, the report said, citing people it didn’t identify.
The concern is mainly about the disparity in the MSCI Emerging Markets Index’s allocation to Chinese and Indian stocks, the report said. China constitutes more than 30 percent of the gauge, while India forms nearly 10 percent, according to the MSCI website.

Earlier this month, the Financial Times cited MSCI Chief Executive Officer Henry Fernandez as saying that there was “zero politics” behind its decision to add more Chinese shares to its benchmark indexes.

“This is a classic adage of advertising, where even if I am right, I have to market myself,” Nilesh Shah, chief executive officer of Kotak Asset Management Co., said on the phone.

MSCI is ultimately serving the investors and India has the right to ensure that the index firm knows how its methodology and decisions may keep investors away from participating in many good businesses operating in India, he said.

Indian government officials declined to comment to the newspaper and Sanyal didn’t reply to an emailed query, the report said. A representative for MSCI didn’t immediately reply to Bloomberg’s email seeking comment.

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Ashutosh Joshi, Jeanette Rodrigues

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