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| A bird's eye view of Seoul's financial district of Yeouido / Yonhap |
By Lee Min-hyung
EcoPro, JYP, Hanwha Ocean and Hanmi Semiconductor suffered sharp declines on Monday, returning part of their recent gains driven by earlier expectations over their much-awaited inclusion in the MSCI Korea Index.
But as all of them had already been forecast to be included in the index, the latest announcement by MSCI about their inclusion came as no big surprise to investors here and abroad, and that was reflected in their weak stock performance.
According to data from the Korea Exchange, JYP suffered a double-digit stock fall on Monday morning, hit by a weaker-than-expected earnings performance. Even with the entertainment company reporting a decent operating profit of 45.7 billion won in the second quarter, its share price recorded a sharp loss due to the overly optimistic earnings outlooks of brokerages. The company closed at 119,000 won per share, down 8.25 percent from the previous trading day.
EcoPro shares also closed down 3.87 percent during the same period, hit by investors' profit-taking selling spree, only one trading day after the firm was included in the MSCI index. This was widely expected.
The two other shares ― Hanwha Ocean and Hanmi Semiconductor ― also extended losing streaks of around 6.7 percent and 4.7 percent respectively during the same period for similar reasons.
Shinhan Securities analyst Lee Jae-rim said investors should focus on each firm's business fundamentals, rather than betting on such widely predicted announcements.
"When taking into consideration the price movements of shares included in the index since 2022, the inclusion, in itself, has only a limited impact from the side of supply and demand of the shares," the analyst said. "Investors are advised to check each firm's fundamentals in detail."
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