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| Kakao Pay's office is seen in this file photo taken at its headquarters in Pangyo, Gyeonggi Province. Yonhap |
By Lee Min-hyung
Kakao Pay is unlikely to join the MSCI index in November due to the firm's rapidly-falling market capitalization, market analysts said Friday.
The mobile payment and digital wallet affiliate of tech giant Kakao had been widely anticipated to be included in the index after it went public on the benchmark KOSPI last year. But given the increasing market volatility here, the firm's possible inclusion in the index appears unlikely for the time being, according to experts.
"The inclusion or exclusion in the index in November will be determined by the market capitalization of companies at a randomly-picked date between Oct. 18 and 31," Yuanta Securities analyst Ko Gyeong-beom said. "But uncertainties have escalated over the market cap of listed firms here due to the volatile market conditions. Kakao Pay will not be included in the index."
The financial arm of Kakao has had to endure a sharp stock price fall for the past few months amid a series of scandals surrounding its top management. The firm's stock price has recently shown a steep downward curve in the aftermath of its parent firm's major service outage.
According to data from the Korea Exchange, Kakao Pay shares soared to a record high of 248,500 won in November of last year. But its valuation has since nosedived at an alarming pace. Shares of the company were traded at around 35,000 won as of Friday. This is a drop of around 85 percent in less than a year.
Shinhan Securities also expected the company to fail to be included on the MSCI index.
"MSCI Korea will include only one stock, Hyundai Mipo Dockyard, during the upcoming rebalancing, and Kakao Pay and defense stocks ― which were anticipated to be included ― will not be able to do so," Shinhan Securities analyst Lee Jae-rim said.
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