Kakao Pay likely to be included in MSCI index next month

South Korean mobile payment services firm Kakao Pay Corp. will be newly incorporated into the MSCI index next month, inducing an influx of more than 80 billion won ($64.3 million) in passive funds, NH Investment & Securities predicted on Monday.

"Kakao Pay will be added to the MSCI Korea Standard Index, which will be announced on Feb. 10, as it meets MSCI's standards for new inclusion," the South Korean brokerage firm said.

MSCI Korea Standard Index requires a market capitalization of above 2.6 trillion won and a floating market capitalization of 1.3 trillion won for inclusion into the index as of Jan. 5.

Floating market capitalization refers to the market capitalization of only floating stocks that can be traded in the market, excluding the shares of major shareholders and related persons.

Kakao Pay satisfies the requirements with a market capitalization of 8.9 trillion won and a floating market capitalization of 1.7 trillion won as of Jan. 9. Its shares have risen more than 23% this year, swelling the market capitalization.

"The possibility of inclusion into the index has increased as Kakao Pay's stock liquidity ratio was greatly raised in June last year when its second-largest shareholder Alipay Singapore Holdings disposed of 5 million shares through a block deal," said Heo Yul, an analyst at NH Investment & Securities.

Write to Se-Young Choi at seyeong2022@hankyung.com