Morgan Stanley Capital International announced Wednesday it has added three South Korean biotechnology stocks to its MSCI Korea Index.

This comes as the technology prowess of the companies has come under the limelight during the novel coronavirus outbreak and subsequently drove up their stock price.

Alteogen, Seegene and Shin Poong Pharma have been added to the index, replacing Daewoo Engineering & Construction, Helixmith and Hyundai Department Store.

Seegene is Korea’s leading exporter of coronavirus testing kits. Shin Poong Pharma entered into a phase 2 clinical trials for anti-malaria drug pyramax’s efficacy in terms of the COVID-19 treatment.

Alteogen in June agreed on a $3.8 billion export deal of its human hyaluronidase technology, which allows a patient to inject drugs under the skin, instead of into a vein, so that the patient could decrease the chance to go to hospital.

Shin Poong Pharma is trading on the nation’s main bourse Kospi, while Seegene and Alteogen are listed on the development board Kosdaq.

Another strong candidate, SK Biopharmaceuticals, stopped short of being included in the index.

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

The index is composed of 107 constituents -- large- and mid-cap stocks -- which cover some 85 percent of the Korean equity universe. Their market cap came to a combined 859 trillion won ($725.4 billion) as of end-July. The index recorded a 15.6 percent annual net return.

The changes will take place on Aug. 31.

According to market analysts, more passive investor influx in the stocks are now expected. Shin Poong Pharma’s passive investing influx is projected to stand at 146 billion won, while that of Seegene and Alteogen will reach 140 billion won and 114 billion won, respectively, according to an estimate by Noh Dong-kil, a derivatives analyst at NH Investment and Securities.

Noh added all the three companies met the criteria of the market cap and free-float market cap, whereas SK Biopharmaceutical failed.

As of 11 a.m., Seegene was trading 3.9 percent lower and Alteogen was 2.5 percent lower, while Shin Poong Pharma was trading 4.6 percent higher.

By Son Ji-hyoung (consnow@heraldcorp.com)