The merger of HDFC Bank and Housing Development Finance Corp (HDFC) Ltd has triggered a series of consequences on their weightage in the MSCI Global Standard indices, an issue that has been closely scrutinized by Nuvama Institutional Equities. The firm has focused its analysis on the concept of 'foreign room' and its potential impact on the MSCI weightage.
Abhilash Pagaria, a notable figure in the financial sector, has also weighed in on the matter, discussing the effects of the HDFC + HDFC Bank merger on MSCI methodology. This comes at a time when FTSE, another global index provider, has made a decision to increase weightage in light of the merger.
However, post-merger liquidity issues have also emerged as a concern alongside HDFC Bank's Q2 update. Nomura, a leading financial services group, has voiced concerns over potential changes in net interest margins, book value, and adjustments to IGAAP accounting following the merger.
In addition to these changes, there are upcoming rebalances worth $500 million that have been noted. These rebalances are expected to further influence the financial landscape following the merger between HDFC Bank and HDFC Ltd.
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