Index heavyweights stocks like Reliance Industries (RIL), ONGC, Larsen & Toubro (L&T), State Bank of India (SBI) and BHEL are among 15 stocks that could see an exit from S&P BSE Sensex over the next decade – That’s what seems to be the case according a research by Ambit Capital.
The report predicts the pace of churn in the 30-share index’s constituents to gather momentum. According to Ambit’s analysis, Sensex’s churns over a 10-year window from 1986 to date shows that the churn ratio of the Sensex tends to rise when the economy is undergoing irreversible structural changes.
Over the next decade, the report predicts the pace of churn in the 30-share index’s constituents to gather momentum. The current economic-political environment, Ambit says, will usher in an era of change which will drive Sensex churn higher driven by Prime Minister Narendra Modi’s resets to the Indian economy.
Then what could be the stocks replacing them? – The new entrants could include Flipkart, Paytm, Cafe Coffee Day and ICICI Prudential Life Insurance. Well, it seems an interesting analysis. Such changes in indices re-emphasize on investing in Index Funds or Index ETFs like Nifty Bees.
Be a wise investor !