Morgan Stanley Capital International has added two large and mid-cap South Korean stocks -- Douzone Bizon and Celltrion Pharm -- to its global and regional equity index, as part of rebalancing in May, according to industry sources Wednesday.
The US company added information and communications technology solutions and services provider Douzone Bizon and Celltrion Pharm, a pharmaceutical firm under Celltrion, to the MSCI Korea Index.
In the meantime, some firms such as biopharma firm Meditox, OCI, HDC Hyundai Development Company, KCC and Hanwha Life Insurance were removed from the index. Hanjin KAL failed to join the club.
Prior to the announcement, local securities firms were eyeing whether Korean Air’s parent firm would be able to make it to the list despite its low liquidity. The market capitalization of Hanjin KAL far exceeded the MSCI’s minimum standard, but its falling liquidity ratio became an obstacle.
While the index rebalancing is set to take effect after the market closes on May 29, market watchers forecast that some passive funds would be withdrawn from the local stock market.
“Among the emerging markets, China’s weight has increased from 40.5 percent to 41.5 percent, while Korea accounted for 12.6 percent -- down 3 percentage points,” said Kang Song-chul, an analyst of Shinhan Investment. “Massive dumping from the local market is expected when the index changes become effective.”
Meanwhile, stock prices of newly added and removed firms had mixed fortunes during Wednesday’s trading session.
Shares of Douzone Bizon hit a 52-week high of 115,000 won ($93.93) in early morning, then inched down to close at 106,000 won -- up 5,000 won, or 4.95 percent -- from the previous session’s close. Celltrion Pharm’s stock price also reached a new 52-week high intraday, surging 7,800 won, or 10.10 percent, to close at 85,000 won.
On the contrary, Hanjin KAL’s shares closed at 79,700 won, nosediving 11,800 won, or 12.90 percent. Shares of OCI and Meditox also fell 1.56 percent and 3.63 percent, respectively, at the closing bell.
While HDC Hyundai Development Company’s shares shed 2.60 percent, KCC and Hanwha Life Insurance’s stock prices declined 0.68 percent and 0.92 percent, respectively, on the same day.
By Jie Ye-eun (email@example.com