MSCI calculates the free float-adjusted market capitalization for each security. Free float-adjusted m-cap is used to calculate the weights of securities in the MSCI index.
MSCI announced on February 9 that it is reviewing the free-float status of Adani Group's securities based on certain concerns from various market participants.
"MSCI has received feedback from a range of market participants regarding the eligibility and free float determination of specific securities belonging to the Adani Group for the MSCI Global Investable Market Index (GIMI)," MSCI said in a statement.
So, what is free-float?
MSCI calculates the free float-adjusted market capitalization for each security. Free float-adjusted market-capitalization (m-cap) is technically a method of calculating the m-cap of stocks that are readily available in the market. It is calculated by multiplying the share price of equity by the number of shares available in the market. This method excludes passive shares or lock-in shares such as promoter shares, government shares or shares held by insiders.
MSCI calculates the free-float m-cap on parallel lines. The process of free float-adjusting m-cap involves defining and estimating the free float available to foreign investors for each security, as explained on the MSCI website. Free float-adjusted m-cap is used to calculate the weights of securities in the MSCI index.
No comments:
Post a Comment