Eight stocks, including LG CNS, which was newly listed in February this year, are expected to be included in the KOSPI large-cap index during the regular change of indices based on market capitalization scheduled for September.
According to Korea Investment & Securities on the 28th, changes to the market capitalization-based indices (large, medium, and small-cap indexes) are planned for September 12. Regular changes are conducted on the second Friday after the expiration date of futures and options every March and September, and announcements of changes are typically made one week prior to the regular change.
In particular, the market capitalization of large-cap stocks on the KOSPI accounts for 84% of the KOSPI and 72% of all listed corporations, drawing market attention. Shin Chae-rim, a researcher at Korea Investment & Securities, projected the inclusion of eight stocks: Hanwha, APR, Kiwoom Securities, CJ CheilJedang, Hyundai Steel, ISU PETASYS, and Korea Gas Corporation, along with LG CNS, which was newly listed in February this year. The 7 stocks expected to be excluded from large-cap to medium-cap include SKC, SK bioscience, and CJ CheilJedang.
Shin noted that the combined net worth of active and passive exchange-traded funds (ETFs) tracking the pure KOSPI large-cap and medium-cap indices is 41.37 billion won, indicating it is not significant, making up only about 0.02% of the total ETF net worth. He added that while there could be demand for buying and selling indices centered on large-cap stocks, the size of fund capital is small, so the market shock resulting from changes to the market capitalization-based index is likely to be minor.
Nonetheless, Shin stated, "While the size of tracking funds is small, opportunities may arise in specific stocks. Historically, stocks that were upgraded from the KOSPI medium-cap index to the large-cap index saw an upward trend for about 10 trading days after the announcement of changes, thanks to the large-cap inclusion effect." He suggested that considering the higher probability of an increase after the announcement of changed stocks, a strategy of buying stocks confirmed to be included in the large-cap index after this announcement would be effective.