LS Electric Co., a South Korean electrical equipment manufacturer, will be added to the Morgan Stanley Capital International (MSCI) Korea Index, according to MSCI’s announcement on Tuesday. This inclusion reflects the company’s rising market capitalization and is part of MSCI Inc.’s regular rebalancing of its indexes, which occurs every February, May, August, and November.
Conversely, SK IE Technology Co. (SKIET) will be removed from the index. These adjustments, set to take effect at the close of trading on August 30 and effective from September 2, are expected to prompt notable shifts in passive fund investments.
The inclusion of LS Electric in the MSCI Korea Index is anticipated to result in an inflow of approximately 148.5 billion won (around $108.29 million) in passive funds. Meanwhile, SKIET is projected to experience an outflow of roughly 55 billion won as a consequence of its removal.
These changes could have a significant impact on the stock performance of both companies, as inclusion in the MSCI index often leads to increased visibility and investment interest from global investors tracking the index. The rebalancing highlights the dynamic nature of market indices and their role in guiding investment strategies.
