The majority of the stocks in the MSCI India Index have been listed for more than 20 years – one of the oldest in the Asia-Pacific region. On the other hand, China’s stock index is the “youngest” in the region, with an average listing age of just nine years, according to an analysis by Goldman Sachs Global Investment Research. The average listing age for most stock markets in Asia Pacific excluding Japan is between 20 and 25 years. Goldman Sachs’ listing age is “a good indicator of change and innovation”.

“The (MSCI India) index remains dominated by financials and old economy / traditional sectors. The lack of fast-growing New Economy / Digital stocks in the index has caused India’s earnings to lag the region, while the internet-heavy China index has made the best gains over the past decade, ”a note said Brokerage.

Goldman Sachs predicts that the average trading age for India will decrease in the future as large new age companies enter the public markets. “Indian stock indices could experience greater representation of the new economy sectors in the next 2-3 years if large digital IPOs are included in the index,” it says.

The entry of new age companies will increase revenue, but make the indices more expensive.

“The addition of new listings could add 20 percent to total revenues for the MSCI India Index on a pro forma basis. However, valuations for the index could rise amid short-term negative earnings from some unicorns and expensive valuations from digital tech companies, ”the Goldman Sachs note said.

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