{"id":2657,"date":"2022-03-11T08:07:33","date_gmt":"2022-03-11T08:07:33","guid":{"rendered":"https:\/\/blog.researchandranking.com\/?p=2657"},"modified":"2025-11-06T23:55:31","modified_gmt":"2025-11-06T18:25:31","slug":"msci-to-remove-russian-stocks","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/msci-to-remove-russian-stocks\/","title":{"rendered":"What happens if Russian Stocks are removed from MSCI Indexes? Find out now"},"content":{"rendered":"
<\/div>\n

MSCI to Remove Russian Stocks<\/strong> – A war has never done any good to anyone. However, there could be an opportunity in disguise for the Indian equity markets<\/a> as the tensions between Russian and Ukraine heats up.
While we write this, our heart goes out to those who\u2019ve been living through this crisis and have lost their loved ones. A top executive at Morgan Stanley Capital International (MSCI) says a removal of Russian listings from (M.S.C.I) indexes is a \u201cnatural next step\u201d as Russia\u2019s stock market<\/a> is \u201cun-investable\u201d after stringent new western sanctions and central bank<\/a> curbs on trading.<\/strong><\/strong><\/p>\n\n\n\n

\n

\u201cIt would not make a lot of sense for us to continue to include Russian securities if our clients and investors cannot transact in the market.\u201d<\/strong><\/em><\/p>\nDimitris Melas<\/cite><\/blockquote>\n\n\n\n

Melas is (Morgan Stanley Capital International) M.S.C.I\u2019s head of index research and chair of the Index Policy Committee.<\/p>\n\n\n\n

Are you wondering if this will help the Indian equity markets? <\/p>\n\n\n\n

\n

\u201cIf M.S.C.I finalizes to remove Russian stocks from EM (Emerging Markets) Index and at the same time FIIs are not restricted to sell the constituents then it could lead to 25 bps increase of India in MSCI Emerging Markets. The inflow in India as per current EM market cap could be $600 million, which will mainly get distributed in index heavyweights like Reliance Industries, Infosys, HDFC, ICICI Bank, and Tata Consultancy Services\u201d.<\/strong><\/em><\/p>\nAbhilash Pagaria, Head of Edelweiss Alternative Research<\/cite><\/blockquote>\n\n\n\n

In our opinion this step seems highly likely. The invasion of Ukraine has caused mass departure of companies from Russia. The country\u2019s largest foreign investor, BP Plc. announced on Sunday that it would exit its 20% stake in state-run Rosneft. This move resulted in a $25 billion write-off in value.<\/p>\n\n\n\n

Norway\u2019s biggest energy Company Equinor ASA announced withdrawing from its JVs worth $1.2 billion in Russia. Moreover, global<\/a> financial institutions are either winding down or suspending business in Russia, due to heavy sanctions by western countries.<\/p>\n\n\n\n

Removing Russian securities from the MSCI\u2019s EM index will be a significant event. M.S.C.I is an investment research organization that provides Hedge Funds and institutional investors with stock indices, portfolio risk, performance analytics, and governance tools. The organization is well-known for its benchmark indexes, such as MSCI Emerging Market Index and M.S.C.I Frontier Markets Index. It has been introducing indexes since 1969 and has published over 1,60,000 indexes focusing on different geographies, stock types etc.<\/p>\n\n\n\n

This means, whether it a demography or stock, the large equity investors rely on MSCIs intelligence to make their next investment move.<\/p>\n\n\n\n

So, if M.S.C.I says Russia has become an \u201cun-investable\u201d market, you must pay attention to this development.<\/p>\n\n\n\n

Impact of removing Russian stocks from MSCI Indexes on Indian stock exchange<\/h2>\n\n\n\n

Coming back to Edelweiss\u2019 analysis, if the M.S.C.I excludes Russian securities from the EM Index it could benefit the Indian markets.<\/p>\n\n\n\n

Russia currently has 2.3% weightage in the MSCI\u2019s EM index. Edelweiss expects it to drop to zero post removal. After that China, Taiwan, India, and Korea will benefit the most from this development.<\/p>\n\n\n\n

While we hope the Indian equities get the possible inflows worth $600 mn at the earliest, participants cannot exit these Russian stocks due to restrictions and passive investors may have to hold-on to their investments<\/a> longer. If M.S.C.I removes the Russian stocks and investors get a chance to exit, then diverting funds to other emerging markets may be possible.<\/p>\n\n\n\n

However, we don\u2019t know when this will happen. We urge you to pay attention, stop, evaluate, and then decide on your investment strategy.<\/p>\n\n\n\n

What do you think of this article?<\/p>\n\n\n\n

Send your replies to createwealth@researchandranking.com<\/a> and tell us.<\/p>\n\n\n\n

In the meantime, subscribe to 5 in 5 Wealth Creation Strategy<\/a> and become a wealth creator.<\/p>\n\n\n\n

Read more: About Research and Ranking<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

MSCI to Remove Russian Stocks – A war has never done any good to anyone. However, there could be an […]<\/p>\n","protected":false},"author":5,"featured_media":3125,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[9],"tags":[],"class_list":["post-2657","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=2657"}],"version-history":[{"count":1,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2657\/revisions"}],"predecessor-version":[{"id":59820,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/2657\/revisions\/59820"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/3125"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=2657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=2657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=2657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}