REC, Adani, Piramal Healthcare in MSCI index

Shares of Rural Electrification Corp. Ltd. (REC) jumped after MSCI included the state-run power finance company, Piramal Healthcare and Adani Enterprises in the MSCI India Index. REC is also one of the three largest additions to the MSCI Emerging Market Index. Idea Cellular was removed from the MSCI India index. MSCI also added 51 Indian stocks in the Global Small-Cap indices while removing 12 stocks from the index. These changes resulted from the May 2010 Semi-Annual Index Review and will come into effect from May 26.

Forty-two securities were added to and 45 securities were deleted from the MSCI Global Standard Indices. Five hundred eleven securities were added to and 188 securities were deleted from the MSCI Global Small Cap Indices. Several emerging market funds benchmark their performance to MSCI gauges. These funds, especially exchange-traded, have to buy these shares to ensure their returns reflect the movements of the MSCI Emerging market Index. The revision will lead to more institutional participation in the three Indian stocks as global funds, active and passive, are benchmarked against MSCI indices and mirror the index.