President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> , <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a>, and <a href="https://www.smartkarma.com/entities/haier-electronics-group-co" target="_blank" data-smartkarma-citation="entities:4877:1" rel="noopener">Haier Electronics Group Co (1169 HK)</a> were stealing share from <a href="https://www.smartkarma.com/entities/electrolux-ab" target="_blank" data-smartkarma-citation="entities:22351:1" rel="noopener">Electrolux AB (ELUXB SS)</a> prior to the pandemic.  After pandemic induced demand surge subsides, Vision expects these market share headwinds to revive while <a href="https://www.smartkarma.com/entities/electrolux-ab" target="_blank" data-smartkarma-citation="entities:22351:1" rel="noopener">Electrolux AB (ELUXB SS)</a> faces difficult comparisons leading to weak top line growth and rising commodity costs weigh on profits.</p>

Samsung Electronics (005930 KS) , LG Electronics (066570 KS), and Haier Electronics Group Co (1169 HK) were stealing share from Electrolux AB (ELUXB SS) prior to the pandemic.  After pandemic induced demand surge subsides, Vision expects these market share headwinds to revive while Electrolux AB (ELUXB SS) faces difficult comparisons leading to weak top line growth and rising commodity costs weigh on profits.

Electrolux (ELUXB SS): Asian Competitors, Difficult Comps, & Rising Commodity Costs Create Headwinds

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>Samsung's huge special dividend (+ quarterly div) for FY2020 comes on April 16.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="80">
<col width="80">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Special dividend"}'>Special dividend</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ord"}'>Ord</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1P"}'>1P</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Div"}'>Div</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1932}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩1,932</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1933}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩1,933</td>
</tr>
<tr>
<td>- Quarterly</td>
<td style="text-align: right;">₩354</td>
<td style="text-align: right;">₩355</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Special"}'>- Special</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1578}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}' data-sheets-formula="=R[-1]C[0]-354">₩1,578</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1578}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}' data-sheets-formula="=R[-1]C[0]-355">₩1,578</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment date"}'><strong>Payment date</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42481}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'><strong>16/4/21</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":42481}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'><strong>16/4/21</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11677}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'>31/12/20</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11677}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'>31/12/20</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex rights-1D"}'>Ex rights-1D</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47107}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'>28/12/20</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47107}' data-sheets-numberformat='{"1":5,"2":"yy/m/d","3":1}'>28/12/20</td>
</tr>
<tr><td colspan="3" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>The total div amounts to ₩13.1T: 2.31% of the Ord SO and 2.57% of the 1P SO.</p><p>As a % of DTV, it is 7.6x for Ord and 13.6x for 1P.</p><p>Out of ₩13.1T, ₩7.7T (59%) will be going to the foreign shareholders.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="80">
<col width="80">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Special dividend"}'>Special dividend</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Ord"}'>Ord</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"1P"}'>1P</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SO"}'>SO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":5969782550}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance("005930", "shares")'>5,969,782,550</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":822886700}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance("005935", "shares")'>822,886,700</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total div (₩B)"}'>Total div (₩B)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11533.6198866}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[-1]C[0]*R[-25]C[0]/1000000000">11,533.6</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1590.6399911}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[-1]C[0]*R[-25]C[0]/1000000000">1,590.6</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"% of MC"}'><strong>% of MC</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.023137724550898204}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]*1000000000/(googlefinance("005930", "price")*googlefinance("005930", "shares"))'><strong>2.31%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.025773333333333332}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]*1000000000/(googlefinance("005935", "price")*googlefinance("005935", "shares"))'><strong>2.58%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"% of DTV"}'><strong>% of DTV</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":7.589329418866759}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-2]C[0]/(googlefinance("005930", "volumeavg")*googlefinance("005930", "price")/1000000000)'><strong>758.93%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":13.577458461157631}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-2]C[0]/(googlefinance("005935", "volumeavg")*googlefinance("005935", "price")/1000000000)'><strong>1357.75%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FO"}'>FO</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5582}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>55.82%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.8204}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>82.04%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FO shares"}'>FO shares</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":3332143450}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>3,332,143,450</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":675105949}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>675,105,949</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total div for FO (₩B)"}'><strong>Total div for FO (₩B)</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6437.7011454}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[-30]C[0]*R[-1]C[0]/1000000000"><strong>6,437.7</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1304.979799417}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[-30]C[0]*R[-1]C[0]/1000000000"><strong>1,305.0</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"% of MC"}'>% of MC</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.01291474466020201}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]*1000000000/(googlefinance("005930", "price")*googlefinance("005930", "shares"))'>1.29%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.02114474648684118}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[-1]C[0]*1000000000/(googlefinance("005935", "price")*googlefinance("005935", "shares"))'>2.11%</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

Samsung's huge special dividend (+ quarterly div) for FY2020 comes on April 16.







Special dividend
Ord
1P


Div
₩1,932
₩1,933


- Quarterly
₩354
₩355


- Special
₩1,578
₩1,578


Payment date
16/4/21
16/4/21


Record date
31/12/20
31/12/20


Ex rights-1D
28/12/20
28/12/20

Source: KRX

The total div amounts to ₩13.1T: 2.31% of the Ord SO and 2.57% of the 1P SO.As a % of DTV, it is 7.6x for Ord and 13.6x for 1P.Out of ₩13.1T, ₩7.7T (59%) will be going to the foreign shareholders.







Special dividend
Ord
1P


SO
5,969,782,550
822,886,700


Total div (₩B)
11,533.6
1,590.6


% of MC
2.31%
2.58%


% of DTV
758.93%
1357.75%


FO
55.82%
82.04%


FO shares
3,332,143,450
675,105,949


Total div for FO (₩B)
6,437.7
1,305.0


% of MC
1.29%
2.11%

Source: KRX



Samsung Special Div Payment Event on April 16: What to Expect

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a>, <a href="https://www.smartkarma.com/entities/axiata-group-berhad" target="_blank" data-smartkarma-citation="entities:944:1" rel="noopener">Axiata Group (AXIATA MK)</a>, GlobalFoundries, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:JD.com Inc. (9618 HK), Prosus (PRX NA), Naspers (NPN SJ), Tencent Holdings (700 HK), Xiaomi Corp (1810 HK), Anglo American (AAL LN), Axiata Group (AXIATA MK), GlobalFoundries, TSMC (2330 TT), Samsung Electronics (005930 KS)

Global Emerging Markets Weekly: 9 April 2021

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<div class="content-highlight">
<p>On 9 April, the <a href="https://www.reuters.com/article/southkorea-nps/update-1-s-koreas-pension-fund-adjusts-rules-to-raise-domestic-equity-allocation-idUSL1N2M20EN" target="_blank" rel="noopener">NPS</a> announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.</p>
<p>NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). <strong>As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.</strong></p>
</div>


On 9 April, the NPS announced that it will change rules to increase the allocation of Korean stocks, which would be the first time in a decade. This adjustment could be implemented starting next week. This change comes after a lot of pressure by the retail investors.
NPS increased the strategic asset allocation (SAA) limit for domestic equities from the current 2% to 3%, increasing the percentage of Korean stocks it can hold from the current band of 14.8% -18.8% (+/- 2% with 16.8% as base) to 13.8% -19.8% (+/- 3% with 16.8% as base). NPS's target of the domestic equity allocation is 16.8% (of total fund amount). As a result of this change, the sale of domestic stocks by the NPS is expected to slow down.


<p>The Korea NPS made it official that it would increase the SAA tolerable band from ±2.0%p to ±3.0%p but reducing the TAA to ±2.0%p to keep the overall tolerable band at ±5.0%p.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"SAA &amp; TAA allowable range"}'>SAA &amp; TAA tolerable bands</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SAA"}'>SAA (strategic asset allocation)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"TAA"}'>TAA (tactical asset allocation)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Domestic bonds"}'>Domestic bonds</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±3.5"}'>±3.5%p</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±5.0"}'>±5.0%p</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Overseas bonds"}'>Overseas bonds</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±0.5"}'>±0.5%p</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±1.0"}'>±1.0%p</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Domestic stocks"}'><strong>Domestic stocks</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±2.0"}'><strong>±3.0%p</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±3.0"}'><strong>±2.0%p</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Overseas stocks"}'>Overseas stocks</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±1.0"}'>±1.0%p</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±1.0"}'>±1.0%p</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Alternative"}'>Alternative</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±1.2"}'>±1.2%p</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±1.2"}'>±1.2%p</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: Korea NPS"}'>Source: Korea NPS</td></tr>
</tbody>
</table><div>
<p>As of January this year, the actual weight is 21%, 4.2% over the target of 16.8%.</p>
<table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
<col width="200">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"NPS local equity weight"}'>NPS local equity weight</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"FY2020 yearend"}'>FY2020 yearend</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"FY2021 Jan"}'>FY2021 Jan</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.173}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>17.30%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.168}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>16.80%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Actual"}'>Actual</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.212}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>21.20%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.21}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>21.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Excess %"}'>- Excess %</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03900000000000001}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]-R[-2]C[0]">3.90%</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.04199999999999998}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]-R[-2]C[0]">4.20%</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: SED"}'>Source: SED</td></tr>
</tbody>
</table>
<p>It was under SAA ±2.0%p and TAA ±3.0%p.</p>
<p>Assuming the SAA ±2.0%p being filled up, the TAA was filled up at 73% (2.2%p of the 3%p limit).</p>
<p>Now with the SAA extended up to 3%p, 73% of the 2%p room comes at 1.5%p.</p>
<p><strong>Assuming the SAA is filled up and the TAA still stays at the same 73%, the NPS can raise the local equity weight by 0.3%p, which translates into ₩0.5T worth of immediately available funds for additional local equity buying.</strong></p>
<p><em>* The local equity holding totaled ₩180T as of Jan 2021. The NPS owns 6.95% of KOSPI and KOSDAQ combined and 8.24% of KOSPI.</em></p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"(₩T) - as of Jan 2021"}'>(₩T) - as of Jan 2021</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Amount"}'>Amount</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Weight"}'>Weight</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total assets"}'>Total assets</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":855.3}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>855.3</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='[null,3,"0.00%",1]'>100.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Financial investment"}'>Financial investment</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":854.1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>854.1</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.999}' data-sheets-numberformat='[null,3,"0.00%",1]'>99.90%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Domestic equity"}'><strong>Domestic equity</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":180}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'><strong>180.0</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.21}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>21.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Overseas equity"}'>Overseas equity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":201.3}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>201.3</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.235}' data-sheets-numberformat='[null,3,"0.00%",1]'>23.50%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Domestic bonds"}'>Domestic bonds</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":330.9}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>330.9</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.387}' data-sheets-numberformat='[null,3,"0.00%",1]'>38.70%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Overseas bonds"}'>Overseas bonds</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":47.6}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>47.6</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.056}' data-sheets-numberformat='[null,3,"0.00%",1]'>5.60%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Alternative"}'>Alternative</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":92.2}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>92.2</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.108}' data-sheets-numberformat='[null,3,"0.00%",1]'>10.80%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Short-term liquidity"}'>Short-term liquidity</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2.1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>2.1</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.002}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.20%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Other"}'>Other</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>1.0</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.001}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.10%</td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: Korea NPS"}'>Source: Korea NPS</td></tr>
</tbody>
</table>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"(₩T)"}'>(₩T)</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSPI"}'>KOSPI</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"KOSDAQ"}'>KOSDAQ</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Number of companies"}'>Number of companies</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":805}'>805</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1496}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,496</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Number of constituents "}'>Number of constituents</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":923}'>923</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1499}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>1,499</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Market cap"}'>Market cap</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2183.408}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>2,183.4</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":405.1}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}'>405.1</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Combined"}'>Combined</td>
<td colspan="2" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":2588.508}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[-1]C[0]+R[-1]C[1]">2,588.5</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Korea NPS"}'>Korea NPS-owned local equity</td>
<td colspan="2" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":180}' data-sheets-numberformat='{"1":2,"2":"#,##0.0"}' data-sheets-formula="=R[9]C[0]">180.0</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of the combined"}'><strong>- % of the combined KOSPI and KOSDAQ</strong></td>
<td colspan="2" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.06953812775544832}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-2]C[0]"><strong>6.95%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - % of KOSPI"}'><strong>- % of KOSPI</strong></td>
<td colspan="2" rowspan="1" style="text-align: right;" data-sheets-value='{"1":3,"3":0.08243992877190154}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-2]C[0]/R[-4]C[0]"><strong>8.24%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>
</div>

The Korea NPS made it official that it would increase the SAA tolerable band from ±2.0%p to ±3.0%p but reducing the TAA to ±2.0%p to keep the overall tolerable band at ±5.0%p.







SAA &amp; TAA tolerable bands
SAA (strategic asset allocation)
TAA (tactical asset allocation)


Domestic bonds
±3.5%p
±5.0%p


Overseas bonds
±0.5%p
±1.0%p


Domestic stocks
±3.0%p
±2.0%p


Overseas stocks
±1.0%p
±1.0%p


Alternative
±1.2%p
±1.2%p

Source: Korea NPS


As of January this year, the actual weight is 21%, 4.2% over the target of 16.8%.








NPS local equity weight
FY2020 yearend
FY2021 Jan


Target
17.30%
16.80%


Actual
21.20%
21.00%


- Excess %
3.90%
4.20%

Source: SED


It was under SAA ±2.0%p and TAA ±3.0%p.
Assuming the SAA ±2.0%p being filled up, the TAA was filled up at 73% (2.2%p of the 3%p limit).
Now with the SAA extended up to 3%p, 73% of the 2%p room comes at 1.5%p.
Assuming the SAA is filled up and the TAA still stays at the same 73%, the NPS can raise the local equity weight by 0.3%p, which translates into ₩0.5T worth of immediately available funds for additional local equity buying.
* The local equity holding totaled ₩180T as of Jan 2021. The NPS owns 6.95% of KOSPI and KOSDAQ combined and 8.24% of KOSPI.








(₩T) - as of Jan 2021
Amount
Weight


Total assets
855.3
100.00%


Financial investment
854.1
99.90%


Domestic equity
180.0
21.00%


Overseas equity
201.3
23.50%


Domestic bonds
330.9
38.70%


Overseas bonds
47.6
5.60%


Alternative
92.2
10.80%


Short-term liquidity
2.1
0.20%


Other
1.0
0.10%

Source: Korea NPS










(₩T)
KOSPI
KOSDAQ


Number of companies
805
1,496


Number of constituents
923
1,499


Market cap
2,183.4
405.1


Combined
2,588.5


Korea NPS-owned local equity
180.0


- % of the combined KOSPI and KOSDAQ
6.95%


- % of KOSPI
8.24%

Source: KRX




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