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| Kakao Pay management and key officials from the Korea Exchange (KRX) and local brokerage industry celebrate the listing of Kakao Pay on the main benchmark KOSPI market at the lobby of the KRX headquarters on Yeouido, Seoul, Nov. 3, 2021. Yonhap |
By Lee Min-hyung
Kakao Pay's inclusion in the Morgan Stanley Capital International (MSCI) index looks unfeasible in August, even if the likelihood was raised after Alipay dumped millions of shares in the Korean firm in a recent block deal, analysts said Thursday.
Last month, Alipay Singapore Holding, the second-largest shareholder of Kakao Pay, sold 5 million Kakao Pay shares. This was equivalent to 3.77 percent of the Kakao subsidiary's entire stocks.
This enabled Kakao Pay to meet the standard for its potential inclusion in the MSCI index, as the firm's free float stock ratio topped 15 percent, which is a prerequisite for inclusion on the index.
The results of the MSCI Quarterly Index Review will be announced on Aug. 12.
Earlier hopes were that the Kakao affiliate would be able to join the index. But market analysts said chances appear slim for the company to do so, as Kakao Pay's free float market capitalization still falls far short of the MSCI standard for the time being.
"Kakao Pay's free float market capitalization should exceed 2.3 trillion won for the MSCI inclusion," Yuanta Securities analyst Koh Kyung-beom said. But the figure is around only 1.27 trillion won.
"It is realistically difficult for the company to be able to join the index."
Kakao Pay has been suffering a steep decline in its stock value this year. Its shares were once traded at around 230,000 won last year, but the price tumbled down to around the 60,000 won range after the company was mired in a series of scandals surrounding the management's moral hazard.
The company closed at 67,400 won on Thursday on the Seoul bourse, up 5.15 percent from the previous trading day.
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