Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

We attended the 2016 IoT Exhibition &amp; International Conference (Seoul) yesterday, which is the largest one for the IoT sector in Korea. We wanted to kick some tires and see in person some of the interesting developments in the IoT sector. Internet of Things will likely be one of the key investment themes over the next decade. Korea is well positioned to capitalize on this trend, driven by its high penetration of smartphones and broadband as well as its leadership on high-tech products and…

We attended the 2016 IoT Exhibition &amp; International Conference (Seoul) yesterday, which is the largest one for the IoT sector in Korea. We wanted to kick some tires and see in person some of the interesting developments in the IoT sector. Internet of Things will likely be one of the key investment themes over the next decade. Korea is well positioned to capitalize on this trend, driven by its high penetration of smartphones and broadband as well as its leadership on high-tech products and…

Internet of Things Will Change the World (Part 7) - 2016 IoT Exhibition & Conference in Seoul

There are some important regulatory changes that are coming to the IPOs market for companies listing on the KOSDAQ exchange in Korea. Although the exact dates of when these new measures will be enforced were not announced, these measures are expected to become enforced starting 4Q16. Financial Services Commission (FSC) is the key government entity that is spearheading these changes. We believe the net effect of these changes is positive for the investors and negative for the securities companies…

There are some important regulatory changes that are coming to the IPOs market for companies listing on the KOSDAQ exchange in Korea. Although the exact dates of when these new measures will be enforced were not announced, these measures are expected to become enforced starting 4Q16. Financial Services Commission (FSC) is the key government entity that is spearheading these changes. We believe the net effect of these changes is positive for the investors and negative for the securities companies…

Important Regulatory Changes for IPOs on the KOSDAQ Exchange

<ul><li>The six major events in the Korea Stock Market in September were as follows: LG Chem-LG Life Sciences merger, Hanjin Shipping applying for court receivership, Samsung Electronics involved in a major product recall of Galaxy Note 7, the start of One-Shot Act program, the opening of Shinsegae's Starfield Hanam, and Hanmi Pharm's ending of license deal with Boehringer.</li><li>The best-performing sectors in September were Media/Telecom (up 3.1% YoY) and Software/Internet (up 2.8% YoY). The worst-performing sectors were Health Care (down 2% YoY) and Shipbuilding (down 2.6% YoY). </li><li>Our top picks in the stock market were up 0.1% on average in September versus KOSPI which was up 0.2% in the same period. </li></ul>

The six major events in the Korea Stock Market in September were as follows: LG Chem-LG Life Sciences merger, Hanjin Shipping applying for court receivership, Samsung Electronics involved in a major product recall of Galaxy Note 7, the start of One-Shot Act program, the opening of Shinsegae's Starfield Hanam, and Hanmi Pharm's ending of license deal with Boehringer.The best-performing sectors in September were Media/Telecom (up 3.1% YoY) and Software/Internet (up 2.8% YoY). The worst-performing sectors were Health Care (down 2% YoY) and Shipbuilding (down 2.6% YoY). Our top picks in the stock market were up 0.1% on average in September versus KOSPI which was up 0.2% in the same period. 

Korea Stock Market Monthly Recap #6 - (September 2016)

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

In a somewhat surprising development, OPEC members have tentatively agreed to a production target of between 32.5 million and 33.3 million barrels per day, representing a reduction of up to 700 mb/d from current production levels of 33.2 mmb/d.Oil prices rallied on the news, but our view for continued low prices of $50/bbl in 2017 (detailed in <a href="https://www.smartkarma.com/insights/oil-markets-fundamentals-improving-but-u-s-shale-still-looms" target="_blank">Oil Markets: Fundamentals Improving, but U.S. Shale Still Looms</a>) remains unchanged, as we do not believe the potential reduction will have a meaningful sustainable impact on oil prices. While the low end of the target range is nearly 1 mmbd lower than our 2017 forecast for OPEC production, and if realized, it would balance markets and reduce inventories sooner than our original expectations, we see numerous risk factors that we think prevent a sustained recovery in prices until 2018.Analysts: Stephen Simko, CFA &amp; Lorraine Tan, CFA

In a somewhat surprising development, OPEC members have tentatively agreed to a production target of between 32.5 million and 33.3 million barrels per day, representing a reduction of up to 700 mb/d from current production levels of 33.2 mmb/d.Oil prices rallied on the news, but our view for continued low prices of $50/bbl in 2017 (detailed in Oil Markets: Fundamentals Improving, but U.S. Shale Still Looms) remains unchanged, as we do not believe the potential reduction will have a meaningful sustainable impact on oil prices. While the low end of the target range is nearly 1 mmbd lower than our 2017 forecast for OPEC production, and if realized, it would balance markets and reduce inventories sooner than our original expectations, we see numerous risk factors that we think prevent a sustained recovery in prices until 2018.Analysts: Stephen Simko, CFA &amp; Lorraine Tan, CFA

OPEC Cuts, U.S. E&Ps Drill: Our Oil Price Outlook Remains Unchanged

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

In May we noted that Saudi was likely to pursue a production maximisation policy for 6 months, with a freeze or cuts likely as we head into winter.This appears to have been prescient as OPEC yesterday announced that OPEC-14 production levels would be capped at 32.5-33mbpd, a slight decrease over the levels achieved over summer and back at Doha talks levels.However, detail is lacking on the proposal and there is strong reason to doubt potential enforceability of any agreement, with oil jumping but still being flat month on month as a result.This piece explores some of these issues and potential market action.

In May we noted that Saudi was likely to pursue a production maximisation policy for 6 months, with a freeze or cuts likely as we head into winter.This appears to have been prescient as OPEC yesterday announced that OPEC-14 production levels would be capped at 32.5-33mbpd, a slight decrease over the levels achieved over summer and back at Doha talks levels.However, detail is lacking on the proposal and there is strong reason to doubt potential enforceability of any agreement, with oil jumping but still being flat month on month as a result.This piece explores some of these issues and potential market action.

South Korea

SK Innovation Co., Ltd. refines, markets, and distributes oil.  The Company produces a variety of petroleum products, such as gasoline, kerosene, liquefied petroleumgas (LPG), and diesel oil.  SK Energy also manufactures petrochemical p roducts, including paraxylene, synthetic resins, styrene monomer, and ethylene.

HD Hyundai Co.,Ltd. operates as a oil refining company. The Company provides crude oil refining, petroleum refinery, and other related products. HD Hyundai markets its products worldwide.

GS Holdings is a holding company, which operates subsidiaries including GS Caltex Oil, GS Power, GS Home Shopping, GS Retail, and GS Sports.

SK Gas Ltd imports, stores, and distributes liquefied petroleum gas (LPG). The Company supplies its products mainly to domestic market for household, the transportation industry, and petrochemical products manufacturers.

Hankook Shell Oil Co., Ltd. manufactures and markets lubricants, grease, and other petroleum products used for cars, vessels, industrial machinery, and cutting tools.  The Company exports its products to Southeast Asian countries, Russia, and China.  Hankook Shell is an affiliate of Royal Dutch Shell Group.

Heunggu Oil Co. Ltd. distributes petroleum products through its network of gasoline and liquefied petroleum gas (LPG) stations.

Mi Chang Oil Industrial Co., Ltd. refines, produces, and distributes lubricants used in industrial machinery, ships, and automobiles.  The Company also produces rubber processing oil for rubber products manufacturing and insulating oil for electrical properties.

JC Chemical Co., Ltd, manufactures biofuels including biodisel and other byproducts derived from bioenergy source.

Joong Ang Enervis Co., Ltd. distributes petroleum products.  The Company operates a network of gasoline and liquefied petroleum gas (LPG) stations. Joong Ang Enervis' products include gasoline, kerosene, lubricating oil, and low sulfur diesel.

Keystone Global is in coal business selling its coal to steel producers. The Company also operates smartcard business which offers the smartcard with IC chips embedded.

SM Energy Company is an independent energy company that explores for and produces natural gas and crude oil.  The Company's operations are focused on The ArkLaTex, Gulf Coast, Mid-Continent, Rocky Mountains, and Permian Basin regions.

Huolinhe Opencut Coal Industry Corporation Limited of Inner Mongolia is mainly involved in the production and selling of coal in China.

Huolinhe Opencut Coal Ind Corp Ltd. (002128 CH)

PT Adaro Energy Tbk is a coal mining company. The Company and its subsidiaries currently deal in coal mining and trade, coal infrastructure and logistics, and mining contractor services.

Shanxi Xishan Coal & Electricity Power Co., Ltd. mines and processes coal. The Company also generates electric power.

PBF Energy Inc. is an independent petroleum refiner and supplier. The Company offers unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. PBF's finished products are sold through long-term offtake and supply agreements.

California Resources Corporation is an independent oil and natural gas company. The Company focuses on maximizing the value of land, mineral and technical resources for decarbonization by developing carbon capture and storage and other emissions reducing projects. California Resources serves customers in the State of California.

Guanghui Energy Co., Ltd. is principally engaged in energy development, automotive services and real estate property leasing. The Company is in the business of coal mining and related coal chemical manufacturing. The Company is also engaged in the processing and distributing of granite materials and trading of general merchandise such as plastic doors and windows.

Shanxi Lu'an Environmental Energy Development Co., Ltd. mines, processes, and markets low sulfur high quality coal. The company also researches and develops coal and environment protection related technologies.

Shanxi Lu'An Environmental Energy Dev.Co (601699 CH)

Mangalore Refinery and Petrochemicals Limited refines oil and produces petroleum and petrochemicals. The Company is a subsidiary of ONGC. Mangalore Refinery operates a refinery in Mangalore city that produces premium diesel and unleaded petrol of high octane.

Mangalore Refinery and Petrochemicals Limited (MRPL IN)

Mangalore Refinery and Petrochemicals Limited

PDC Energy, Inc. produces and distributes petroleum products. The Company produces, develops, explores and markets crude oil, natural gas, and natural gas liquids. PDC Energy operates in the United States.

S-Oil Corporation refines crude oil and sells petroleum and its related products.  The Company mainly focuses on petroleum refining, petrochemical, and lubricant business. S-Oil's major products are gasoline, bunker oil, kerosene, naphtha, lubricants, benzene, toluene, and xylene.

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S Oil Corp (010950 KS)

Internet of Things Will Change the World (Part 7) - 2016 IoT Exhibition & Conference in Seoul

We attended the 2016 IoT Exhibition & International Conference (Seoul) yesterday, which is the largest one for the IoT sector in Korea. We...

Douglas Kim

Important Regulatory Changes for IPOs on the KOSDAQ Exchange

There are some important regulatory changes that are coming to the IPOs market for companies listing on the KOSDAQ exchange in Korea. Although the...

Douglas Kim

Korea Stock Market Monthly Recap #6 - (September 2016)

The six major events in the Korea Stock Market in September were as follows: LG Chem-LG Life Sciences merger, Hanjin Shipping applying for court...

Douglas Kim

OPEC Cuts, U.S. E&Ps Drill: Our Oil Price Outlook Remains Unchanged

In a somewhat surprising development, OPEC members have tentatively agreed to a production target of between 32.5 million and 33.3 million barrels...

Morningstar, Inc.

Can OPEC Cut Production

In May we noted that Saudi was likely to pursue a production maximisation policy for 6 months, with a freeze or cuts likely as we head into...

Emad Mostaque

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