The Korea Exchange (KRX) recently announced significant changes to its major indices, including the Korea Value-Up Index, KOSPI 200, KOSDAQ 150, and KRX 300. These changes are set to take effect from June 13 following a review by the index operations committee.
Among the notable adjustments, 32 stocks are set to be removed from the Value-Up Index, with Korea Zinc, ISU Petasys, Celltrion, and Ottogi being some of the companies affected. In contrast, 27 new stocks will be added to the index, with a focus on defense and financial sectors, such as Hyundai Rotem, Hanwha Systems, JB Financial Group, and Samsung Securities.
While the removal of certain stocks from the index was based on the assessment of shareholder value, concerns were raised regarding companies like Korea Zinc, ISU Petasys, and Celltrion for various reasons, including damaging shareholder value and failing to meet specific criteria post-merger.
Experts at the Value-Up Policy seminar emphasized the need for broader application of the initiative beyond large corporations and financial institutions. Lee Sang-ho, a researcher at the Korea Capital Market Institute, highlighted the lower PBRs of non-financial firms in South Korea compared to global standards, suggesting a push for reasonable shareholder return policies even among large corporations.
In the KOSPI 200, eight stocks were added while eight were removed, reflecting changes in market dynamics. Similarly, the KOSDAQ 150 witnessed adjustments with nine stocks added and nine removed, indicating a shift in sectoral representation.
Within the KRX 300, 28 new stocks were included, while 27 were removed, showcasing a continuous evolution in the composition of major indices. This demonstrates the dynamic nature of the stock market and the need for periodic reviews to ensure relevance and accuracy in reflecting market trends.
The Korea Exchange’s commitment to maintaining the integrity and effectiveness of its indices is crucial for providing investors with accurate benchmarks for performance evaluation. By periodically reviewing and updating the components of major indices, the exchange ensures that these indices remain reflective of the evolving market landscape.
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As the financial markets continue to evolve, indices play a vital role in guiding investment decisions and gauging market sentiment. The proactive approach taken by the Korea Exchange in revising its indices underscores its dedication to upholding market integrity and providing investors with reliable tools for navigating the complex world of finance.
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