Besides Bank of Baroda, this stock is a potential candidate to enter MSCI: Report

In the run-up to the index review by global index aggregator MSCI Inc in February, Nuvama Alternative and Quantitative Research believes that Power Finance Corporation (PFC) is a strong candidate for making its entry into the global index, if the recent trading pattern of the stock is anything to go by.

In the last three trading days, the stock has seen higher trading volumes, supported by higher delivery-based buying in the cash market. Further, there has been a meaningful build-up in open interest in the derivative segment.

For a couple of sessions in the last week, the stock was under F&O ban. Securities in the ban period under the F&O segment include companies in which the security has crossed 95% of the market-wide position limit.

At the current juncture, the stock needs to trade at around Rs 170 to make an entry into the global index of MSCI in the upcoming review, Nuvama said in a note.

The price requirement is as per the current global market capitalisation cut off levels, and these levels change on a daily basis. The market cap cut-off date will be any one day in the latter half of January, the brokerage said.

Shares of Power Finance Corp have risen nearly 14% since December. The stock on Wednesday snapped its seven-day winning streak.

On Tuesday, the stock hit an over 5-year high of Rs 157.8 on the National Stock Exchange.

Prior to PFC, Nuvama had said that Bank of Baroda is likely to enter the MSCI global index in the February review.

The stock is safely trading above the current market-cap cut-off levels and, thus, holds a high chance to get included, the brokerage said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)