[Photo provided by Seegene]
The Morgan Stanley Capital International, the world’s largest index provider, has newly added three bio names from South Korea - Seegene, Alteogen and Shinpoong Pharmaceutical – in lieu of traditional players like Daewoo Engineering & Construction and Hyundai Department Store in its MSCI index on Thursday.
Market analysts predicted that the companies each will draw more than 100 billion won ($84.5 million) foreign passive money. NH Investment & Securities predicted Seegene could attract 140 billion won, Alteogen 114 billion won and Shinpoong 146 billion won. Shinhan Financial Investment projected Seegene would draw 359 billion won, Alteogen 227.2 billion won and Shinpoong 146 billion won from global investors.
Those stocks showed mixed performances on the Korean market. Shinpoong Pharmaceutical gained 4.6 percent to close Thursday at 75,100 won in the main Kospi, while Alteogen ended down 1.21 down at 187,700 won and Seegene 4.9 percent lower at 273,700 won in junior Kosdaq market.
Despite market expectations, SK Biopharmaceutical failed to join the index in the latest rebalancing because it failed to meet the MSCI’s free floating-adjusted market cap requirement, according to NH Investment Securities analyst Noh Dong-gil.
On the other hand, Helixmith, Daewoo Engineering & Construction and Hyundai Department Store were removed from the index due to the failure to satisfy its market cap requirement.
State-run Industrial Bank of Korea (IBK) avoided exclusion, but the fall in current ratio would lead to a slight money outflow, according to market experts. Current ratio is a liquidity ratio that measures a company’s ability to pay short-term debt.
The new index adjustment will take effect on August 31.
Noh advised investors sell the newly joined stocks on August 31 to raise profit as passive money mostly flows into the domestic market on the day.
By Shin Yoo-kyung and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]