by Nikolai Dzis-Voinarovsky
Rosneft shares may become included into MSCI indexes. MSCI Barra index agency is now discussing with investors whether they can include Rosneft into the new Enhanced Standard Index. It is expected to happen in late 2007. However, analysts say the Russian company’s share in the new index will be insignificant.
MSCI Barra decided to split the current index for developing markets MSCI EM into two -- Enhanced Standard Index and Enhanced Small Cap Index. The agency suggests to include such Russian companies as Rosneft (Standard), and Mechel, Vimm-Bill-Dann, Uralsvyazinform, Volgatelekom, Sibirtelekom (Small Cap).
Despite the market’s expectations, Rosneft shares were not included into MSCI index in 2006. MSCI Barra promised to publish the final method of estimating new indexes no later than March 31.
Many investors take into account MSCI indexes, and some investment funds even buy shares in same proportions as those shares are in indexes. Including a company’s stock into the index might lead to rapid quotations growth in the short-term future, and to influx of funds in the long-term perspective. The demand for Rosneft’s shares might grow by $100 million (that is about 1 percent of its free-float). However, the price may go up even more drastically, for many investors were not buying Rosneft’s shares before, and the company’s inclusion into the index will be a positive signal.
Large investors are likely to turn their attention completely to Enhanced Standard Index. Thus, they might somewhat ignore the companies that fell into Enhanced Small Cap Index category after MSCI EM index was split. However, analysts believe the drop in quotations of those companies will be just short-term, since many funds invest not only into blue chips but also into small cap companies.
Rosneft shares may become included into MSCI indexes. MSCI Barra index agency is now discussing with investors whether they can include Rosneft into the new Enhanced Standard Index. It is expected to happen in late 2007. However, analysts say the Russian company’s share in the new index will be insignificant.
MSCI Barra decided to split the current index for developing markets MSCI EM into two -- Enhanced Standard Index and Enhanced Small Cap Index. The agency suggests to include such Russian companies as Rosneft (Standard), and Mechel, Vimm-Bill-Dann, Uralsvyazinform, Volgatelekom, Sibirtelekom (Small Cap).
Despite the market’s expectations, Rosneft shares were not included into MSCI index in 2006. MSCI Barra promised to publish the final method of estimating new indexes no later than March 31.
Many investors take into account MSCI indexes, and some investment funds even buy shares in same proportions as those shares are in indexes. Including a company’s stock into the index might lead to rapid quotations growth in the short-term future, and to influx of funds in the long-term perspective. The demand for Rosneft’s shares might grow by $100 million (that is about 1 percent of its free-float). However, the price may go up even more drastically, for many investors were not buying Rosneft’s shares before, and the company’s inclusion into the index will be a positive signal.
Large investors are likely to turn their attention completely to Enhanced Standard Index. Thus, they might somewhat ignore the companies that fell into Enhanced Small Cap Index category after MSCI EM index was split. However, analysts believe the drop in quotations of those companies will be just short-term, since many funds invest not only into blue chips but also into small cap companies.
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