Hanwha Investment & Securities expects that five stocks, including HD Hyundai Marine Solution, will be newly included in the MSCI (Morgan Stanley Capital International) August regular review.
On July 16, analyst Han Si-hwa of Hanwha Investment & Securities stated in the report "MSCI August Regular Review" that "five stocks, namely LIG Nex1, Doosan, Hyosung Heavy Industries, Hyundai Engineering & Construction, and HD Hyundai Marine Solution, are expected to be added, while three stocks, LG Innotek, CJ CheilJedang, and SKC, are expected to be excluded."
The review results will be announced in the morning of August 8, Korea Standard Time, and the index rebalancing will be conducted based on the closing prices on August 26. The data used to determine index inclusions and exclusions will be selected arbitrarily on one day between July 15 and July 28.
Han explained, "Compared to the previous review reference date of April 17, the share prices of LIG Nex1, Doosan, Hyosung Heavy Industries, and Hyundai Engineering & Construction have risen by 110%, 117%, 117%, and 88%, respectively." He added, "As of July 15, their market capitalizations exceed the inclusion threshold, so they are expected to move from the Small Cap Index to the Standard Index."
He also projected that HD Hyundai Marine Solution, which previously failed to be included due to insufficient free-float market capitalization, will be added in this review. Regarding this stock, he explained, "On May 2, the second-largest shareholder, KKR, sold a 9.5% stake, which increased the free-float ratio. The free-float market capitalization now stands at 2.4 trillion won, surpassing the cutoff of 2.1 trillion won."
The three stocks expected to be excluded?LG Innotek, CJ CheilJedang, and SKC?have each risen by more than 5% since the May review reference date, but their market capitalizations were found to fall short of the threshold. Han pointed out, "They are likely to be pushed down in the inclusion priority and move from the Standard Index to the Small Cap Index."
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