EcoPro joins MSCI Korea Index

EcoPro BM's manufacturing facility in Korea's southeastern city of Pohang / Yonhap

By Lee Min-hyung

EcoPro joined the much-sought-after MSCI Korea Index, Friday, rekindling hopes for additional foreign capital inflow to the red-hot secondary battery materials producer.

According to the August index review by MSCI, four Korean firms ― EcoPro, Hanmi Semiconductor, Hanwha Ocean and JYP ― were all included in the index. However, CJ and E-mart were excluded following the latest decision.

Brokerage houses expected EcoPro to attract 1.2 trillion won ($906 million) worth more capital after the firm's inclusion in the index.

According to data from Eugene Investment & Securities, the figure also comes in at 197 billion won for JYP. Hanwha Ocean and Hanmi Semiconductor are forecast to attract 120 billion won and 113 billion won, respectively, after their MSCI inclusions.

Despite the MSCI announcement, EcoPro shares suffered a slight decline from the previous trading day. The company closed down 2.49 percent at 1.137 million won per share. But shares of JYP and Hanmi closed with a gain of 1.97 percent and 2.24 percent, respectively, during the same period. Hanwha Ocean inched down by 0.11 percent.

Nevertheless, some securities firms warned against blind optimism over the MSCI inclusion of the stocks, as the expectation may have already been reflected in their current stock prices.

“Investors have a tendency of preemptively buying and selling certain shares with hopes on the MSCI inclusion, so the stocks' supply and demand pattern has become more complex,” Samsung Securities analyst Kim Dong-young said. “Foreign investors' net buying of some shares that recently joined the index has gotten smaller than before.”

Nam Ah-ran, an analyst at Daol Investment & Securities, said that the four companies were widely expected to join the index, so their stock valuation will not display any drastic ups or downs over their inclusion.