[Click eStock] LG EnSol Short-Term Shock... Locked-In Shares to Be Released

On the morning of the 27th, officials attending the LG Energy Solution's KOSPI new listing ceremony held at the Korea Exchange in Yeouido, Seoul, are celebrating the start of trading. From the left, Kyunghoon Song, Deputy General Manager of the Korea Exchange KOSPI Market Division; Sanghwan Ahn, Chairman of the Korea IR Council; Sangwook Cho, CEO of Morgan Stanley Seoul Branch; Jaejun Lim, General Manager of the Korea Exchange KOSPI Market Division; Byungdoo Son, Chairman of the Korea Exchange; Youngsoo Kwon, CEO of LG Energy Solution; Changsil Lee, CFO of LG Energy Solution; Sunghyun Kim, CEO of KB Securities; Kiheon Lee, Executive Vice Chairman of the Listed Companies Association. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Junho Hwang] From the 27th, the lock-up shares of LG Energy Solution will be released. It is expected that a short-term supply and demand shock will occur as 4.3% of the committed shares circulate in the market.

According to Yuanta Securities on the 26th, at the time of the release of LG Energy Solution's 3-month committed shares, the intraday low recorded -4.3% the day before the release and -6.3% on the day of release. However, the closing prices recovered by -2.2% and -1.3%, respectively. This is believed to be influenced by the relatively low committed volume of 0.8% and the fact that institutions maintained their holdings due to domestic operational realities.

However, this time the volume to be released amounts to 4.3%. The allocation to institutions such as asset management companies will significantly increase from 0.56% of 3-month committed shares to 2.3%. It is expected that there will be a high incentive to dispose of shares exceeding the appropriate weight. The allocation to pension funds, insurance, and banks is also concentrated in 6-month commitments. Other funds, judged to be financial investments, also have a high allocation rate. It is also unusual that foreigners hold 1.0% of 6-month committed shares.

Due to the increase in circulating shares, it is still early to expect a price rise momentum from inclusion in various indices.

Kyungbeom Ko, a researcher at Yuanta Securities, said, "The expectation for an increase in LG Energy Solution's inclusion weight in the MSCI regular review next month (announcement on the 12th, rebalancing on the 31st of the same month) should be lowered," adding, "The change in the free float ratio related to the lock-up release on the 27th cannot be fully reflected in this month's regular review."

He continued, "It may be fully reflected after non-reflection next month by November, or partially reflected this month with the remainder reflected in November, but since the free float ratio is low, it is highly likely that the inclusion weight change will not be actively reflected."

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