Seoul: Morgan Stanley Capital International Inc. (MSCI) has announced the addition of three new companies, including defense firm LIG Nex1 Co., to its Korea Index, a key gauge of South Korea's stock market. Despite these additions, the total number of constituents in the index remains unchanged at 81.
According to Yonhap News Agency, the U.S.-based provider of investment research and indices included construction and robotics firm Doosan Co., LIG Nex1, and electric motor maker Hyosung Heavy Industries Corp. in the Korea Index. Concurrently, the index saw the removal of leading food company CJ Cheiljedang Corp., electric components maker LG Innotek Co., and SKC Ltd., a chemical products maker. This rebalancing is scheduled to take effect on August 26.
MSCI conducts a review of the Korea Index every three months to adjust for changes in the market capitalization of the underlying securities. The index is regarded as a benchmark for the South Korean market, and shifts in its composition can impact the movements of passive funds that track it.
Market analysts had anticipated a greater number of additions compared to exclusions in the August review, fueled by the strong performance of South Korea's stock market relative to its global counterparts. In February, the MSCI removed 11 companies from the index without adding any, amid a downturn in the local stock market. However, the index provider made two additions and two removals in its review conducted in May.