In the FTSE index rebalancing scheduled for the 20th, 17 stocks, including OliX Pharmaceuticals and ROBOTIS, will be added only in the small-cap segment. In mid-caps, a supply-demand effect is expected, with the new inclusion of the preferred shares of Korea Investment Holdings and promotions of names such as APR and ABL Bio.
Compared with the Morgan Stanley Capital International (MSCI), the FTSE indices have a lower impact from tracking funds, so index performance tends to be more relevant during the rebalancing week or nearby dates.
Ko Kyung-beom, a researcher at Yuanta Securities Korea, said, "Judging by the recent popularity of KOSDAQ active exchange-traded funds (ETFs), momentum for the keyword of the active fund universe has strengthened more than the practical tracking funds' assets under management (AUM)."
From this perspective, the analyst said this index inclusion issue could be used as an event strategy. The reason is that, relative to KOSPI, fundamentals are weaker and investment accessibility is limited.
Most of the FTSE index small-cap additions this time are KOSDAQ stocks. ▲OliX Pharmaceuticals ▲ROBOTIS ▲Orum Therapeutics ▲SPG ▲Seers Technology ▲Taesung ▲Qurient ▲Hyulim Robot ▲Jeju Semiconductor ▲Curiox Biosystems ▲G2GBIO ▲AprilBio ▲HJ Shipbuilding & Construction ▲Wonik Holdings ▲ROKIT Healthcare ▲Inventage Lab ▲Clobot
Although the number of small-cap additions increased sharply in this regular change on momentum such as the activation of KOSDAQ, Ko analyzed that the expected effect is not high in terms of the actual rebalancing effect, given the recent rise in trading value and market capitalization. Ko projected that this regular change would likely deliver a supply-demand effect for the mid-cap group.
In mid-caps, the preferred shares of Korea Investment Holdings will be newly included. Ko said, "Although trading value for preferred shares is low, the supply-demand effect in this regular change will be the largest." Rebalancing demand within FTSE is expected to be around 25.6 billion won.
APR, ABL Bio, Rainbow Robotics, and ISU Petasys will be promoted from the small-cap index to mid-caps, likely drawing up to 178 billion won in buying demand. OTOKI, Hitejinro, and Kakao Games will be downgraded to the small-cap index, with selling demand of around 15 billion won expected.
Ko said, "It is worth noting that the rebalancing effect for the mid-cap promotion group is the highest in this regular change."