[Alpha Biz= Paul Lee] Amidst the sluggish performance of the domestic stock market, 11 Korean stocks have been removed from the global benchmark index, the Morgan Stanley Capital International (MSCI) index.
According to the February regular review released by MSCI on Wednesday, 11 stocks have been removed from the MSCI Korea Index, including Samsung E&A, LG Energy Solutions (L&F), GS, Hanmi Pharmaceutical, Kumho Petrochemical, Enchem, Netmarble, SK Bioscience, Lotte Chemical, Posco DX, and LG Chem Preferred Stocks. No new stocks were added. As a result, the number of constituent stocks in the MSCI Korea Index will be reduced from 92 to 81 starting from March.
The MSCI index is one of the most influential global benchmark indices, and stocks included in the index typically see an increase in buying demand from funds that track the index, which can boost their prices. Conversely, stocks removed from the index generally face a decline in price. MSCI conducts regular reviews to adjust the composition of the index in February, May, August, and November, with changes based on market capitalization and free float market capitalization. Stocks that lose importance due to shrinking market capitalization are removed from the index.
Korean securities firms estimate that approximately 1.1 trillion Korean won in capital will be withdrawn due to these removals. The changes will take effect on March 3, with the adjustments reflected after the market close on February 28. At one point, the number of constituent stocks in the MSCI Korea Index reached a maximum of 115, and the proportion of Korea in the MSCI Emerging Markets Index used to range between 10% and 18%. However, it has now dropped to nearly 9%.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
