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LS Electric Cheongju Smart Factory View. (Photo=LS Electric) |
[Alpha Biz= Reporter Kim Minyoung] NH Investment & Securities expects LS Electric to be added to the MSCI Index in the upcoming August review scheduled for August 12th (local time), while SK IE Technology is likely to be excluded. The MSCI will announce the results of the quarterly review at 8 AM Korean time on August 13th.
NH Investment & Securities highlights that LS Electric has demonstrated a steady increase in stock price since the beginning of the year, driven by expectations of rising electricity demand in the U.S., which supports its anticipated inclusion in the index.
Conversely, SK IE Technology, which has been experiencing a decline in stock performance amid deteriorating conditions in the secondary battery sector, is projected to meet the criteria for exclusion.
The firm notes that the number of constituents in the MSCI Korea Standard Index has been decreasing, from 109 prior to the changes last November to 98 currently. This trend is attributed to the underperformance of the Korean stock market compared to global indices. As a result, NH Investment & Securities advises monitoring potential removal candidates more comprehensively in preparation for further reductions.
Additionally, the index inclusion is expected to generate significant index effects, with passive fund inflows potentially benefiting less liquid stocks more significantly.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
