India's weightage in MSCI Emerging Markets index may go up on June 21
Korea, Taiwan may be upgraded to Developed Markets status
MSCI will announce the results of 2012 Annual Market Classification Review on June 21, 2012. Korea and Taiwan that are currently classified as Emerging Markets could be upgraded to Developed Markets as a result of which India's weightage will increase.
According to a report by Morgan Stanley, China and Brazil will gain the most after the re-classification.Korea and Taiwan have continued to meet most of the Developed Markets criteria within the MSCI framework, notably economic development, market size and liquidity. However, not all criteria are met particularly when it comes to market accessibility, the report added.
In case only Korea is reclassified as developed market than India's weightage will increase to 7.59% from 6.41% as of now.
In case only Taiwan is reclassified as developed market than India's weightage will increase to 7.20% from 6.41% as of now.
In case both Korea and Taiwan are reclassified as developed markets than India's weightage will increase to 8.73% from 6.41% as of now.
However, the report also stated, should MSCI decide to keep Korea and Taiwan as Emerging Markets, there will be no changes to MSCI Developed Markets and Emerging Markets indices.