[Click eStock] LG Energy Solution, When Is the Right Time to Sell?

[Asia Economy Reporter Park So-yeon] NH Investment & Securities stated that "from March 11, LG Energy Solution will be included in the KOSPI 200 index, and short selling will be allowed, so caution is necessary."

According to FN Guide on the 22nd, NH Investment & Securities said in a recent report, "Looking at past cases where the smaller the free float market capitalization, the higher the stock price return on the listing day, the stock price is likely to overshoot on the listing day," adding, "We believe the stock price will find its proper value from the time it is included in the major indices."

LG Energy Solution is scheduled to be listed on the 27th. It will be included as a constituent stock of the KOSPI index on the next trading day, the 28th.

The free float ratio of LG Energy Solution, confirmed through the securities issuance performance report, is 9.47%. Concerns about early inclusion in the KOSPI 200 have been resolved.

Although LG Energy Solution has a large market capitalization, the number of shares actually circulating in the market is small. Heo Yul, a researcher at NH Investment & Securities, said, "On the listing day, the stock price is likely to overshoot due to buying pressure from major investors benchmarking the KOSPI index."

From February 7, it will be included in major indices, and passive funds are expected to flow in. Since all major indices use a free float market capitalization weighting method, the index effect is expected to be limited. Also, NH believes that since the inclusion in major indices will be confirmed simultaneously with LG Energy Solution's listing, most of it will be priced in advance.

Researcher Heo Yul said, "Active funds are more likely to sell in line with this timing," adding, "From that point on, the stock price is expected to find its proper value."