The Korea Exchange (KRX) said Thursday it has decided not to implement a new rule meant to prevent major indices from dominant influence of a single stock.
The stock market operator previously considered applying the so-called “30 percent cap” rule on market bellwether Samsung Electronics by June, as its weight on Kospi 200 increased to 33.5 percent as of Jan. 20 from 29.8 percent of Dec. 2.
“The purpose of applying the rule was to comply with regulations. Due to the revision, setting the limit has now become less necessary,” a KRX official said.
Instead, the bourse has suggested a parallel calculation of uncapped local stock indexes and capped overseas stock indexes as a new method to promote foreign investment in local securities.
The final decision will be made after hearing public comments on the proposed change in the cap rule until April 22.
Meanwhile, Samsung Electronics’ proportion in the Kospi 200 accounted to 33.19 percent as of Wednesday, as individual investors scooped the large-cap stock despite the coronavirus crisis.
By Jie Ye-eun (email@example.com