As changes to the large, medium, and small cap stock indices for the KOSPI and KOSDAQ markets are announced, analysts noted that buying stocks included in the large-cap index for short-term profit realization may be effective based on past cases.
Shin Chae-rim, a researcher at Korea Investment & Securities, said on the 4th, "In the past, there was a tendency for stock prices to rise during the 10 trading days following the announcement of the confirmed inclusion in the large-cap index."
The new stocks included in the KOSPI large-cap index are Hanwha, CJ, Hyundai Steel, ISU PETASYS, Kiwoom Securities, LG Innotek, and APR. Korea Gas Corporation could not be included in the large-cap index as its average market capitalization over the three months fell short of Doosan Robotics.
The assets under management (AUM) of exchange-traded funds (ETFs) tracking the indices are 28.2 billion won for the KOSPI large-cap index and 7 billion won for the KOSPI medium-cap index. Shin noted that since all stocks newly included in the KOSPI large-cap and medium-cap indices were expected by the market and the inflow of funds tracking the indices is small, the buying intensity may not be strong.
However, Shin stated that the passive fund demand for the new medium-cap index stocks may actually be greater. This is because going from the large-cap index to the medium-cap index could increase their weight as they fall into the upper market capitalization ranks within the index.
The stocks that moved from the KOSPI large-cap index to the medium-cap index include LG Innotek, Hanmi Pharmaceutical, SK bioscience, SKC, CJ CheilJedang, Ecopro, SHIFT UP, and others. New listings such as Seoul Guarantee Insurance, d'Alba Global, and MNC Solution have also made their way into the medium-cap index.
This regular index change is expected to take effect starting from the 12th, the day after the September futures and options expiration date.