Which Stocks Benefit from This Month's Regular KOSPI Inclusion Changes?
On the 25th, as the US additional sanctions on Russia did not exceed market expectations and geopolitical risks eased, the KOSPI started the session with a 1% rise. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@
View original image[Asia Economy Reporter Junho Hwang] On the 11th, the regular revision of the KOSPI market capitalization-based indices will take place. Based on past trends, it is analyzed that attention should be paid to stocks that are upgraded from small-cap to mid-cap, and from mid-cap to large-cap. Hyoyul Heo, a researcher at NH Investment & Securities, stated in the March regular revision forecast report on the 1st that "this can be explained by the momentum effect."
The review period for this regular revision was from December last year to the end of February. The review period has ended, and the outline of stocks included or excluded from each index has been somewhat revealed.
The performance according to changes in market capitalization-based indices can be categorized into seven cases. Generally, stocks upgraded from small-cap to mid-cap and from mid-cap to large-cap showed good performance. On the other hand, stocks downgraded from large-cap to mid-cap and from mid-cap to small-cap showed poor performance. Although mid-small cap active funds benchmark the KOSPI mid-cap index, and stocks downgraded from large-cap to mid-cap were expected to receive favorable demand, in reality, the demand effect was short-lived.
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Researcher Heo said, "It is necessary to pay attention to stocks upgraded in this regular revision," and predicted, "Along with existing mid-cap stocks such as Meritz Financial Group, Meritz Fire & Marine Insurance, DB HiTek, Korea Electric Power Technology, and KCC, attention should be paid to stocks that previously belonged to small-cap such as F&F Holdings, Ildong Pharmaceutical, and DTR Automotive."
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