KT Gwanghwamun office building (photo = Yonhap news)

 

[Alpha Biz= Reporter Paul Lee] KT is at risk of deletion a year after it was re-incorporated into the Morgan Stanley Capital International (MSCI) Korea index. This is because foreign investors' shareholding ratio is high, so it is subject to foreign investment limit (foreign room) regulations.

On the 3rd, KT closed at 36,050 won, down 2.57%. KT's stock price has fallen 6.60% over the past month (March 4-April 3). During the period, institutional investors sold 39.7 billion won, while foreigners bought 34.8 billion won. KT's foreign stake has been steadily rising from 42.76% at the beginning of the year to 45.42%.

KT's increased foreign stake was driven by expectations for a "corporate value-up program." KT's share price rose to 42,200 won on Feb. 19 on expectations that KT, a high-dividend telecommunications company, would expand its shareholder return policy.

As KT's foreign stake increases, it is on the verge of being released from the MSCI Korea Index in May. The MSCI adjusts the index's inclusion through regular changes four times a year. Telecom stocks, including KT, are Foreign Investment Restriction (Foreign Ownership Limit) stocks with a limited foreign stake of 49%. The MSCI index values how much more foreigners can buy the stock, so it deviates from the index if the foreign investment limit (Foreign room) remains below 15%.

 

 

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