Computation of KOGI
The KOGI is a market capitalization weighted index of the 50 KSE-listed stocks with good corporate governance. However, in cases where the market capitalization of an issue represents more than 10% of the total market capitalization of the KOGI, the KSE applies a 10% cap to avoid excessive influence of the issue on the index. The base date of the index is July 2, 2001 and its base index is 1,000. The constituent stocks are reviewed and updated in July every year.
Selection Criteria of Constituents
Liquidity and corporate governance evaluation scores are two major factors for selecting constituent stocks. 50 companies are selected in the order of the corporate governance evaluation scores, which are given by the Korea Corporate Governance Service (CGS) among the KSE-listed companies whose liquidity standing falls under top 40 percent in terms of daily average trading value. The companies that were designated as administrative issues or unfaithful disclosure corporations, brought to sanctions by the government for their malpractices in corporate governance or insolvent accounting, and recorded deficits for the latest two years are excluded from the evaluation of CGS. If the constituents are concentrated on specific industries, the Operation Committee of Dividend/Corporate Governance Stock Price Indices may adjust the composition of constituents.
