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.

Quantitative Analysis

<div><p>On April 9, the Korea NPS finalized the changes in the asset allocation tolerable bands. It raised the SAA (strategic asset allocation) from ±2.0%p to ±3.0%p but cut the TAA (tactical asset allocation) to ±2.0%p to keep the overall tolerable band at ±5.0%p.</p></div><div>
<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"}'>Domestic stocks</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±2.0"}'>±3.0%p</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"±3.0"}'>±2.0%p</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>
<hr>
<p><strong>Here is what it would imply on the overall trading pattern:</strong></p>
<div data-message-id="364865"><div><div><div><div><div><ul>
<li>SAA (Strategic Asset Allocation): The fund management committee determines the allocation weight for the portfolio target asset, usually for the next 5 years.</li>
<li>TAA (tactical asset allocation): Each portfolio manager flexibly determines which stock/asset gets an additional weight.</li>
</ul></div></div></div></div></div></div>
<div data-message-id="364867">
<p><strong>Why would this change, while reducing the TAA, stop the selling spree?</strong></p>
<p>The NPS portfolio managers have been pressured to sell in the current market phase because they can only care about maximizing return. On the other hand, the SAA should have been exposed to external political influence. By upping the SAA but reducing the TAA, keeping more local equity while not worrying too much about maximizing absolute return can be more easily justified inside the NPS.</p>
</div>
</div>

On April 9, the Korea NPS finalized the changes in the asset allocation tolerable bands. It raised the SAA (strategic asset allocation) from ±2.0%p to ±3.0%p but cut the TAA (tactical asset allocation) 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



Here is what it would imply on the overall trading pattern:

SAA (Strategic Asset Allocation): The fund management committee determines the allocation weight for the portfolio target asset, usually for the next 5 years.
TAA (tactical asset allocation): Each portfolio manager flexibly determines which stock/asset gets an additional weight.


Why would this change, while reducing the TAA, stop the selling spree?
The NPS portfolio managers have been pressured to sell in the current market phase because they can only care about maximizing return. On the other hand, the SAA should have been exposed to external political influence. By upping the SAA but reducing the TAA, keeping more local equity while not worrying too much about maximizing absolute return can be more easily justified inside the NPS.



Korea NPS Local Equity Trading Goes Extreme: TAA ±2.0%p Must Be Near Zero Now

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>, <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> and <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>. Shorts increased in the Consumer Discretionary, Health Care, Materials and Real Estate sectors, and decreased in the Information Technology, Financials and Consumer Staples sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/asahi-kasei-corp" target="_blank" data-smartkarma-citation="entities:19771:1" rel="noopener">Asahi Kasei (3407 JP)</a>, <a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> and <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a>, <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a>, <a href="https://www.smartkarma.com/entities/shimano-inc" target="_blank" data-smartkarma-citation="entities:3777:1" rel="noopener">Shimano Inc (7309 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a>. Shorts increased in the Industrials, Materials and Health Care sectors, and decreased in the Communication Services, Financials and Consumer Staples sectors.</p></div><div><p>In Korea, shorts increased on <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/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> during the week. This was the first week where short increased substantially in Korea and comes a week ahead of the end of the short sell ban.</p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a>, <a href="https://www.smartkarma.com/entities/china-airlines-ltd" target="_blank" data-smartkarma-citation="entities:4591:1" rel="noopener">China Airlines (2610 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a>, <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> and <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Meituan (3690 HK), Kuaishou Technology (1024 HK), Ping An Healthcare and Technology Company Limited (1833 HK) and Alibaba Group (9988 HK) while there was short covering on Ping An Insurance (H) (2318 HK), Zhongsheng Group (881 HK), AAC Technologies Holdings (2018 HK) and Tencent Holdings (700 HK). Shorts increased in the Consumer Discretionary, Health Care, Materials and Real Estate sectors, and decreased in the Information Technology, Financials and Consumer Staples sectors.In Japan, stocks that saw the most shorts were Toshiba Corp (6502 JP), Asahi Kasei (3407 JP), Olympus Corp (7733 JP) and Monex Group Inc (8698 JP) while shorts decreased on Orix Corp (8591 JP), NTT (Nippon Telegraph &amp; Telephone) (9432 JP), Shimano Inc (7309 JP) and Japan Tobacco (2914 JP). Shorts increased in the Industrials, Materials and Health Care sectors, and decreased in the Communication Services, Financials and Consumer Staples sectors.In Korea, shorts increased on Samsung Electronics (005930 KS), Celltrion Inc (068270 KS), Hyundai Motor Co (005380 KS) and SK Hynix (000660 KS) during the week. This was the first week where short increased substantially in Korea and comes a week ahead of the end of the short sell ban.Stocks in Taiwan that saw the highest increase in shorts were China Steel (2002 TT), China Airlines (2610 TT), United Microelectronics Corp (2303 TT) and Taiwan Cement (1101 TT) while shorts were covered on Innolux Corp (3481 TT), Genius Electronic Optical (3406 TT), Delta Electronics (2308 TT) and Pegatron Corp (4938 TT).

Asia Shorts: Meituan, Kuaishou, Zhongsheng, Toshiba, Monex, Orix, Samsung, HMC, China Steel, Innolux

Event-Driven

The May 3 short-selling resumption will likely highlight the 5 local pairs:
1 stub pair
4 share class pairs
They are the exclusive members of the MC &gt; ₩1T and DTV &gt; ₩10B club, making them the most actively arb-traded pairs in Korea.Also, they are eligible for short-selling right on May 3 as they are part of the Short 350.












Name
Ticker
MC (₩B)
SO
DTV
DTV/SO
30D avg
DTV (₩B)


AmoreG
002790
5,648.4
82,458,180
160,858
0.20%
₩66,850
10.8


Amorepacific
090430
15,023.8
58,458,490
187,379
0.32%
₩260,386
48.8



Samsung Elec 1P
005935
61,716.5
822,886,700
1,415,401
0.17%
₩74,655
105.7


Samsung Elec Ord
005930
493,104.0
5,969,782,550
16,220,095
0.27%
₩83,305
1,351.2



LG Chem 1P
051915
3,017.9
7,688,800
30,796
0.40%
₩387,955
11.9


LG Chem Ord
051910
60,991.8
70,592,343
418,077
0.59%
₩830,818
347.3



Hyundai Motor 1P
005385
2,630.5
24,356,685
79,662
0.33%
₩105,491
8.4


Hyundai Motor Ord
005380
48,182.2
213,668,187
955,060
0.45%
₩226,159
216.0



Hyundai Motor 2PB
005387
3,794.5
36,485,451
90,328
0.25%
₩103,468
9.3


Hyundai Motor Ord
005380
48,182.2
213,668,187
955,060
0.45%
₩226,159
216.0

Source: KRX

On a 20D MA, LG Chem is the only one at -1σ or less.












σ on 20D MA
Ticker
Today
T-1
T-2
T-3
T-4
T-5


AmoreG
002790
1.31
1.77
1.46
1.79
0.92
1.28


Amorepacific
090430



Samsung Elec 1P
005935
1.44
0.69
1.10
0.18
-0.35
-0.03


Samsung Elec Ord
005930



LG Chem 1P
051915
-1.34
-1.80
-1.30
-1.93
-1.53
-0.95


LG Chem Ord
051910



Hyundai Motor 1P
005385
1.13
1.16
1.73
1.87
2.18
2.60


Hyundai Motor Ord
005380



Hyundai Motor 2PB
005387
0.34
1.45
1.06
0.79
1.29
1.45


Hyundai Motor Ord
005380

Source: KRX

But they (the holding company and prefs) are at a discount to the 1-yr means, except for Samsung Elec 1P.Hyundai Motor 2PB, AmoreG, and LG Chem 1P had substantially declined relative to their respective partner.












Price ratio
Ticker
Today
120D mean
120DH
120DL
1Y mean
2Y mean


AmoreG
002790
0.26654
-1.08%
-9.30%
9.17%
-9.13%
-22.50%


Amorepacific
090430



Samsung Elec 1P
005935
0.90799
0.87%
-4.16%
4.52%
2.76%
6.01%


Samsung Elec Ord
005930



LG Chem 1P
051915
0.45428
-3.34%
-13.17%
5.11%
-6.10%
-10.43%


LG Chem Ord
051910



Hyundai Motor 1P
005385
0.47894
3.09%
-5.02%
12.74%
-4.68%
-11.77%


Hyundai Motor Ord
005380



Hyundai Motor 2PB
005387
0.46120
1.18%
-6.27%
10.15%
-9.48%
-20.03%


Hyundai Motor Ord
005380

Source: KRX



5 Most Actively Arb-Traded Pairs in Korea: 1 Stub & 4 Share Class with +₩1T MC & +₩10B DTV

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Equity Bottom-Up

<p>In Korea the safest way to invest is to align your interest as a minority shareholder with those of the family?  Usually the key asset of the chaebol is apparent but what about SK Group? It seems we have an opportunity to hone in what the key asset is.</p>

In Korea the safest way to invest is to align your interest as a minority shareholder with those of the family?  Usually the key asset of the chaebol is apparent but what about SK Group? It seems we have an opportunity to hone in what the key asset is.

The Chaebol Dilemma - What's the Family Jewel(S)?

<p>The April 30 tax report/payment deadline is around the corner.</p><p>The Samsung Lee family must report all of the inheritance tax to the local tax authorities by April 30.</p><p>They are also obligated to pay at least one-sixth of the total by then if they opt for a 5-year grace period option, which is very likely at this point.</p><p>So, it works like this:</p><ul>
<li><strong>One-sixth by April 30</strong></li>
<li><strong>The reminder (five-sixth) in 5 annual installments (an equal one-sixth) at an interest rate of 1.8% per annum</strong></li>
</ul><hr><div class="content-highlight"><h2>Tax amount estimations</h2></div><div><p>Inheritance tax on listed company equity is calculated based on the average of 4-month daily closing prices: 2 months before and 2 months after the passing. The calculation period is August 25 to December 25.</p></div><div><p>At the 2M average prices, it comes at ₩19.1T.</p></div><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 212.5px;" data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Lee Kun-hee's shareholding (₩B)&quot;}">Lee Kun-hee's shareholding (₩B)</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":2,"2":"Shares"}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>Shares</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"%"}'>%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":2,"2":"Aug 25~Dec 25"}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}'>60D avg price on Aug 25~Dec 25</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"Value (₩B)"}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}'>Value (₩B)</td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"005930"}' data-sheets-formula='="005930"'>005930</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":3,"3":249273200}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>249,273,200</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":0.04175582576286636}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[-1]/googlefinance(R[0]C[-2], "shares")'>4.18%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":3,"3":62789.28571428572}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula='=average(index(googlefinance(R[0]C[-3], "price", today()-236, today()-111), 0, 2))'><strong>₩62,789</strong></td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":15651.686175714287}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[0]C[-3]/1000000000"><strong>15,651.7</strong></td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd Preference Shares Non Voting"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd Preference Shares Non Voting</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"005935"}' data-sheets-formula='="005935"'>005935</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":3,"3":619900}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>619,900</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":0.0007533236349548485}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[-1]/googlefinance(R[0]C[-2], "shares")'>0.08%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":3,"3":56154.166666666664}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula='=average(index(googlefinance(R[0]C[-3], "price", today()-236, today()-111), 0, 2))'><strong>₩56,154</strong></td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":34.809967916666665}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[0]C[-3]/1000000000"><strong>34.8</strong></td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Life Insurance co., Ltd</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"032830"}' data-sheets-formula='="032830"'>032830</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":3,"3":41519180}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>41,519,180</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":0.2075959}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[-1]/googlefinance(R[0]C[-2], "shares")'>20.76%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":3,"3":66707.14285714286}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula='=average(index(googlefinance(R[0]C[-3], "price", today()-236, today()-111), 0, 2))'><strong>₩66,707</strong></td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":2769.625871571429}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[0]C[-3]/1000000000"><strong>2,769.6</strong></td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T Corp</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"028260"}' data-sheets-formula='="028260"'>028260</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":3,"3":5425733}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>5,425,733</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":0.029032145887066426}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[-1]/googlefinance(R[0]C[-2], "shares")'>2.90%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":3,"3":115208.33333333333}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula='=average(index(googlefinance(R[0]C[-3], "price", today()-236, today()-111), 0, 2))'><strong>₩115,208</strong></td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":625.0896560416667}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[0]C[-3]/1000000000"><strong>625.1</strong></td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":"Samsung SDS Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung SDS Co Ltd</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"018260"}' data-sheets-formula='="018260"'>018260</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":3,"3":9701}' data-sheets-numberformat='{"1":2,"2":"#,##0"}'>9,701</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":0.0001253718766881457}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula='=R[0]C[-1]/googlefinance(R[0]C[-2], "shares")'>0.01%</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":3,"3":173345.2380952381}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0","3":1}' data-sheets-formula='=average(index(googlefinance(R[0]C[-3], "price", today()-236, today()-111), 0, 2))'><strong>₩173,345</strong></td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":1.681622154761905}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[0]C[-3]/1000000000"><strong>1.7</strong></td>
</tr>
<tr>
<td style="width: 212.5px;" data-sheets-value='{"1":2,"2":" - Total"}'>- Total</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 79.1667px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 94.1667px;" data-sheets-value='{"1":2,"2":"-"}'>-</td>
<td style="text-align: right; width: 77.5px;" data-sheets-value='{"1":3,"3":19082.89329339881}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=sum(R[-5]C[0]:R[-1]C[0])"><strong>19,082.9</strong></td>
</tr>
<tr><td colspan="6" rowspan="1" style="width: 722.5px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>The late Lee's artwork collection is estimated at ₩2.8T, and his other assets (real-estates and cash) are valued at ₩2T.</p><p>All combined, the total gross taxable amount comes at ₩23.9T, which then spits out a total inheritance tax of ₩12T after deductibles and extra charges at a 60% tax rate.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Inheritance tax (₩B)"}'>Inheritance tax (₩B)</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shareholding value"}'><strong>Total shareholding value</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":19082.89329339881}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-4]C[4]"><strong>19,082.89</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Art works"}'><strong>Artworks</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2800}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'><strong>2,800.00</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Real-estates &amp; cash"}'><strong>Real-estates &amp; cash</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2000}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}'><strong>2,000.00</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total gross taxable"}'><strong>Total gross taxable</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":23882.89329339881}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=sum(R[-3]C[0]:R[-1]C[0])"><strong>23,882.89</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Taxable after various deductibles (70%)"}'>Taxable after various deductibles (70%)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":16718.025305379168}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-1]C[0]*0.7">16,718.03</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"20% extra charge (management premium)"}'>20% extra charge (management premium)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":20061.630366455}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-1]C[0]*1.2">20,061.63</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Inheritance tax at a 60% tax rate"}'><strong>Inheritance tax at a 60% tax rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":12036.978219872999}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-1]C[0]*0.6"><strong>12,036.98</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX FIND, Chosun, &amp; Korean NTS"}'>Source: KRX FIND, Chosun, &amp; Korean NTS</td></tr>
</tbody>
</table><p>Unless specified in the will, the inheritance will go at a 1/3 (spouse) to 2/3/N (each child) ratio.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Inheritance tax burden for each family member (₩B)"}'>The inheritance tax burden for each family member (₩B)</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Inheritance tax at a 60% tax rate"}'>Total Inheritance tax</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":12036.978219872999}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=R[-4]C[0]">12,036.98</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Lee JY (oldest)"}'> - Lee JY (oldest)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2674.884048860666}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=2/3*R21C2/3">2,674.88</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Lee Bu-jin (second)"}'> - Lee Bu-jin (second)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2674.884048860666}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=2/3*R21C2/3">2,674.88</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Lee Seo-hyun (third)"}'> - Lee Seo-hyun (third)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":2674.884048860666}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=2/3*R21C2/3">2,674.88</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Hong Ra-hee(spouse)"}'> - Hong Ra-hee (spouse)</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":4012.3260732909994}' data-sheets-numberformat='{"1":2,"2":"#,##0.00","3":1}' data-sheets-formula="=1/3*R[-4]C[0]">4,012.33</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX FIND &amp; Korean NTS"}'>Source: KRX FIND &amp; Korean NTS</td></tr>
</tbody>
</table>

The April 30 tax report/payment deadline is around the corner.The Samsung Lee family must report all of the inheritance tax to the local tax authorities by April 30.They are also obligated to pay at least one-sixth of the total by then if they opt for a 5-year grace period option, which is very likely at this point.So, it works like this:
One-sixth by April 30
The reminder (five-sixth) in 5 annual installments (an equal one-sixth) at an interest rate of 1.8% per annum
Tax amount estimationsInheritance tax on listed company equity is calculated based on the average of 4-month daily closing prices: 2 months before and 2 months after the passing. The calculation period is August 25 to December 25.At the 2M average prices, it comes at ₩19.1T.










Lee Kun-hee's shareholding (₩B)
Ticker
Shares
%
60D avg price on Aug 25~Dec 25
Value (₩B)


Samsung Electronics Co Ltd
005930
249,273,200
4.18%
₩62,789
15,651.7


Samsung Electronics Co Ltd Preference Shares Non Voting
005935
619,900
0.08%
₩56,154
34.8


Samsung Life Insurance co., Ltd
032830
41,519,180
20.76%
₩66,707
2,769.6


Samsung C&amp;T Corp
028260
5,425,733
2.90%
₩115,208
625.1


Samsung SDS Co Ltd
018260
9,701
0.01%
₩173,345
1.7


- Total
-
-
-
-
19,082.9

Source: KRX

The late Lee's artwork collection is estimated at ₩2.8T, and his other assets (real-estates and cash) are valued at ₩2T.All combined, the total gross taxable amount comes at ₩23.9T, which then spits out a total inheritance tax of ₩12T after deductibles and extra charges at a 60% tax rate.





Inheritance tax (₩B)

Total shareholding value
19,082.89


Artworks
2,800.00


Real-estates &amp; cash
2,000.00


Total gross taxable
23,882.89


Taxable after various deductibles (70%)
16,718.03


20% extra charge (management premium)
20,061.63


Inheritance tax at a 60% tax rate
12,036.98

Source: KRX FIND, Chosun, &amp; Korean NTS

Unless specified in the will, the inheritance will go at a 1/3 (spouse) to 2/3/N (each child) ratio.





The inheritance tax burden for each family member (₩B)

Total Inheritance tax
12,036.98


 - Lee JY (oldest)
2,674.88


 - Lee Bu-jin (second)
2,674.88


 - Lee Seo-hyun (third)
2,674.88


 - Hong Ra-hee (spouse)
4,012.33

Source: KRX FIND &amp; Korean NTS



Samsung Inheritance Tax Event: Why Market Being Bearish on Samsung Electronics?

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

Samsung Electronics Pref Shares (005935 KS)

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Samsung Electronics Pref Shares (005935 KS)

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