LS ELECTRIC is Newly Inscribed in MSCI Korea Index

[KOREA FINANCIAL TIMES, Jeong Suneun] LS ELECTRIC has been added to the Morgan Stanley Capital International (MSCI) Korea Index constituents.

SK IE TECHNOLOGY (SKIET) was removed from the index.

MSCI announced today (Aug. 13) the adjustments to the constituents of the Korea Index as part of its periodic review.

MSCI conducts four periodic changes every year, in February, May, August and November, and selects stocks for inclusion in the index based on total market capitalization and float. Inclusion in the indexes is expected to attract global passive inflows that track the indexes.

The index effective date for this periodic change is September 2, and passive funds will be rebalanced near the August 30 closing price.

As a result of the MSCI August rebalancing, Korea's weight in the MSCI EM Index will be reduced by 0.16 percentage points. "It is necessary to be mindful of the volatility on the rebalancing date due to the weight reduction," said Labor Gil, a researcher at Shinhan Investment & Securities.

Securities experts believe that the supply and demand effect may be limited as the event has been expected by the market.

"The passive buying demand for LS ELECTRIC is estimated to be 140 billion won due to its inclusion in the index," said Kang Song-cheol, a researcher at Yujin Investment & Securities, "and the selling demand for SK IE TECHNOLOGY is estimated to be 52 billion won due to its exclusion from the index."


[Dictionary of Current Economic Trivia]

'MSCI indices' are global stock indices developed and published by Morgan Stanley Capital International and used as the primary benchmark for large funds investing globally, particularly in the United States.

In addition to the World Index, which covers developed markets such as the U.S. and Europe, and the Emerging Markets Index (EMF), which covers emerging markets such as Asia, Latin America, and the U.S., there are regional and country-specific indices.

The MSCI EM Indexes, including Korea, are calculated based on companies from 26 major emerging markets, with country weights varying daily based on stock price movements and currency fluctuations.

Jeong Suneun (bravebambi@fntimes.com)