Daily BriefsSouth Korea

South Korea: L&F Co Ltd and more

In today’s briefing:

  • MSCI Korea November SAIR Additions: L&F, F&F, Krafton, & Kakao Games

MSCI Korea November SAIR Additions: L&F, F&F, Krafton, & Kakao Games

By Sanghyun Park

The review period for MSCI November SAIR (semi-annual index review) is the last ten business days of October. The announcement date is November 11, and December 1 is the effective date.

(Source: MSCI)

Below are the inclusion requirements to be applied in this SAIR.

Requirements (× Interim cutoff)Semi-annualNote
Interim cutoff (estimate)₩3.00T
Full market cap requirementInterim cutoff x 1.50
For both outside IMI & Small-Cap→Std
Full market cap hurdle₩4.50T
Float market cap requirementInterim cutoff x 0.50 x 1.50
For outside IMI
Float-adjusted market cap hurdle₩2.25T
Float market cap requirementInterim cutoff x 0.50
For Small-Cap→Std
Float-adjusted market cap hurdle₩1.50T
Source: MSCI & Clepsydra Capital

The following five stocks are highly likely to be included in the Standard Index in this IR. They are currently above the full market cap threshold, which is estimated at ₩4.50T.

NameFull market capNote
Krafton Inc (259960 KS)₩24.13T Recent IPO (outside IMI)
SD Biosensor (137310 KS) ₩5.10T Recent IPO (outside IMI)
L&F Co Ltd (066970 KS) ₩6.58T Small-Cap→Std
F&F (383220 KS) ₩5.60T Small-Cap→Std
Kakao Games Corp (293490 KS) ₩5.10T
Source: KRX

Below are the recent major Korean IPOs. SD Biosensor, Krafton, and Hyundai Heavy Industries exceed the full market cap threshold for this IR. But Hyundai Heavy Industries fails to meet the minimum trading period of 3 months based on the effective date (December 1).

Recent major IPOsTickerListingMarket cap
SD Biosensor Inc13731007. 16₩5.10T
HK Inno.N Corp19594008. 09₩1.64T
Krafton Inc25996008. 10₩24.13T
Lotte Rental Co Ltd08986008. 19₩1.57T
Ajusteel Co Ltd13999008. 20₩0.55T
Iljin HySolus Co Ltd27194009. 01₩2.71T
Hyundai Heavy Industries Co Ltd32918009. 17₩8.81T
Source: KRX & DART

Among the top-cap stocks in the Korea Small Cap Index, only L&F and F&F meet the full market cap threshold based on the current share prices.

(Source: MSCI)

Then, we have Kakao Games, which was again dropped in the final step in the previous IR. This is because MSCI kept lowering the float rate of Kakao Games to an illogical level in the last IR. Currently, Kakao Games’ full market cap meets the requirement. So, again, the key is whether MSCI raises the float rate to 45%, the actual level.

Before it’s here, it’s on Smartkarma