Hana Securities stated that the selection of new stocks to be included in the MSCI index in February next year is highly likely to be determined by foreign investors, naming ISU Petasys and ABL Bio as strong candidates.
On November 19, Lee Kyungsoo, a researcher at Hana Securities, said in a report titled "The Shadow of MSCI Rebalancing: Stocks Chosen by Foreign Investors," "As index volatility increases, demand for alpha strategies is rising," adding, "This is an appropriate time to consider investment ideas related to potential MSCI inclusions and exclusions."
First, Lee pointed out that for APR and HD Hyundai Marine Solution, which were newly included in the MSCI Korea Index this month, "the stocks began to rise about three to four months before the inclusion review (announcement date), and this upward trend was driven by foreign investors."
He continued, "Compared to other investor groups, it was clear that foreign investors were actively buying stocks ahead of their inclusion in the MSCI index," adding, "For stocks such as LIG Nex1, Doosan, and Hyosung Heavy Industries, which were included in August, foreign buying was also evident from mid-April, and these stocks continued to rise steadily until just before the review."
Additionally, in terms of recent stock price movements, he mentioned ISU Petasys, ABL Bio, and Kiwoom Securities as candidates for new inclusion in February next year. Lee noted, "Among these, foreign buying is particularly strong for ISU Petasys and ABL Bio," while "Kiwoom Securities has seen relatively weaker foreign buying."
He explained, "The stocks most likely to be newly included in February next year are ISU Petasys and ABL Bio," but also pointed out, "Each would still need to see a 14% and 13% price increase, respectively." He added, "With about four months remaining until the inclusion date, it is essential to continuously monitor foreign investor flows and the fundamentals of each stock group."
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