The Morgan Stanley Capital International logo (Reuters-Yonhap)

Morgan Stanley Capital International announced on May 12 that it has added four South Korean stocks -- HMM, Hybe, SKC and GC Pharma -- to its global and regional equity index, as part of May rebalancing.

The US company also removed seven listed firms -- Hyundai Marine & Fire Insurance, Hanwha, GS Retail, Samsung Card, Lotte Corp., Korea Gas Corporation and Ottogi -- from the MSCI Korea Index.

As a result, the regional equity index’s constituents of large- and mid-cap stocks fell to 103.

The MSCI Korea Index is one of the MSCI Global Standard Indexes, along with MSCI ACWI Index, MSCI Emerging Markets and more.

The changes will take effect after the market closes on May 28, while the index-tracking passive funds will be rebalanced a day ahead.

“Investors need to be aware that those listed firms omitted from the semi-annual index review are likely to increase short-term volatility in their stock prices,” NH Investment & Securities analyst Noh Dong-kil wrote in a report.

Noh added that the Korean stock market’s position in the MSCI EM Index is set to be lowered by 0.2 percentage point to 13.7 percent. The Chinese market’s portion in the index will be increased by 0.7 percentage point to 38.4 percent, he said.

The market watcher further mentioned that the chances of US-listed Coupang joining the MSCI Korea index were very low for the time being.

By Jie Ye-eun (yeeun@heraldcorp.com)