MSCI Regular Review "Will We Benefit?"

MSCI Regular Review on the 12th
Expected Benefits for Included Stocks
High Returns Between Announcement Date and Inclusion Date

[Asia Economy Reporter Hwang Junho] On the morning of the 12th (Korean time), ahead of the regular MSCI (Morgan Stanley Capital International) Korea index changes, attention is focused on newly included stocks. This interest stems from expectations of passive fund inflows and subsequent stock price boosts due to index inclusion.

According to the financial investment industry on the 11th, the likely inclusion candidates are SK Bioscience, EcoPro BM, SK IE Technology, and Kakao Games. MSCI regularly changes (rebalances) the index components four times a year. The decisions are based on the number of tradable shares, market capitalization, stock price fluctuations over three months, and competitors.

Lee Kyungsoo, a researcher at Hana Financial Investment, said, "Although each stock has a different inclusion index and situation, SK IE Technology and SK Bioscience are expected to be included 100%, while EcoPro BM and Kakao Games have an 80% and 60% chance of inclusion, respectively." If these stocks are confirmed for inclusion, they will be added to the index starting from the 31st.

Recently listed KakaoBank (Kabang) has confirmed special inclusion. When a mega IPO occurs, it has a significant impact on the overall market, so MSCI decides inclusion through special provisions. Kabang's early inclusion in the MSCI Emerging Markets Index was confirmed after the market close on the 6th. The inclusion date for Kabang is the 20th. Kim Dongyoung, a researcher at Samsung Securities, said, "Based on a free float ratio of 11% and the current stock price of 69,800 KRW, KakaoBank's weight in the index is 0.04%, and the demand impact is calculated to be around 200 billion KRW."

Krafton is also likely to be specially included. Ko Kyungbeom, a researcher at Yuanta Securities, analyzed, "Even if it hits the lower limit price on that day, it is expected to be smoothly included in the index. The forfeiture of employee stock ownership and low institutional commitment rates have become factors that increase the probability and weight of inclusion from the index perspective." The inclusion date is expected to be the 24th. On the other hand, companies likely to be excluded include LG Household & Health Care Preferred and SK Telecom.

Investors planning to use this regular change for a buying strategy are advised to invest after the announcement on the 12th. According to Samsung Securities, the period with the highest returns during last year's regular changes (May, August, November) was between the announcement date and the inclusion date.

This content was produced with the assistance of AI translation services.