LS Electric shares drop 5% on first day in MSCI Korea Index

A view of the LS Electric Cheongju Smart Factory. [Courtesy of LS]

LS Electric stocks saw a decline during early trading hours on Monday, dropping over 5 percent on its first day of inclusion in the Morgan Stanley Capital International (MSCI) Korea Index.

LS Electric’s stock was trading at 157,300 won ($117.48) as of 9:20 a.m., down 5.75 percent from the previous trading day. The stock opened at 166,000 won, down 0.54 percent, but the decline has since accelerated.

MSCI announced in August 2024 during its regular review that LS Electric would be the newest addition to its Korea Index, with Monday marking the effective date of this change.

While inclusion in the MSCI Index is generally seen as a positive event due to the potential inflow of passive funds, it is common for stocks to see little movement or even a decline following the actual inclusion. This is often because the stock price has already risen in anticipation of the event, leading to a lack of new catalysts after the inclusion.