Hanwha Aerospace, three other companies included in MSCI Korea Index

Hanwha Aerospace Co. logo [Courtesy of Hanwha Aerospace]

Global index provider Morgan Stanley Capital International (MSCI) has included four companies in its Korea Index while removing four firms.

According to sources from the financial investment industry on Friday, MSCI announced in its regular review in May that it will include Hanwha Aerospace Co., Cosmo Advanced Materials & Technology Co, KT Corp. and POSCO International Corp. in its Korea index, while removing Cheil Worldwide Inc., Lotte Shopping Co., S-1 Corp. and SD Biosensor Inc.

EcoPro Co., one of the strong candidates for inclusion, failed to make it to the index. MSCI is slated to adjust South Korea’s proportion based on the May 31 closing prices of companies included in its Korea Index.

The MSCI Korea Index is aimed at gauging the performance of the large- and mid-cap segments of the South Korean market. Once included in the index, companies can expect global passive funds that track MSCI Indexes to flow into their stocks going forward.

“The impact of a change in components of the MSCI Korea Index is between a decline of 50 billion won ($ 37.48 million) and an increase of 200 billion won depending on the level of floating market capitalization of affected stocks,” said Kim Dong-young, analyst at Samsung Securities Co. “Investors need to consider the trend of the trading volumes of the affected stocks being maximized on the adjustment day.”