Daily Brief Macro: Corporate Value Up in Korea – Focus On Reducing Outstanding Shares and Comparison to M7 and more

• In this insight, we compare the outstanding shares changes in the Korean stock market (KOSPI and KOSDAQ) relative to M7 (Magnificent 7) companies. 
• In Korea, there are more companies such as Samsung C&T, KB Financial, and KT&G that are actively reducing their outstanding shares and investors are rewarding them with higher share prices.
• Top 10 companies in KOSPI that reduced their outstanding shares (from end of 2019 to 5 Sept 24) experienced average share price increase of 116% on average in this period.

• Act II  of the drama begins  and continues from where it left off in early August
• Sentiment has changed – bad news really  is  bad news
• With >100 basis points of cuts already priced in before year end…

• China consumption patterns are divergent; slowing and becoming more volatile at a sub sector level.
• Less certainty over new employment and wage growth, plus wealth worries over housing are some of the causes.  
• We forecast GDP to slow in H2 and be 4.0% in 2025.

• Correspondent Tom Wilson visited Fujairah, a booming port city in the UAE where oil trading has exploded in recent years
• Western sanctions on Russian oil exports have led to a redirection of global energy flows, with the UAE emerging as a major energy trading hub
• Switzerland has historically been a top location for commodity traders due to its banking secrecy and political neutrality, but the rise of UAE as an oil trading hub is shifting the balance of power in oil markets

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• Most recent update of our Country Insights model ranks China as the seventh strongest performer in our labor productivity growth sub-factor. However, the country’s score is downward after the GFC.
• The labor productivity growth sub-factor measures the extent to which labor contributes to GDP. It uses the average growth of GDP per person employed over the past five years.
• This sub-factor is then used to calculate our Country Strength Index, which is the overall country strength score reflecting the country’s macroeconomic, growth potential, political and social strength.

• Dismissing popular concerns alienates potential voters for some traditional and current parties of government. The resultant democratic deficit positions them as far-centre.
• Popular alternative views need careful respect, either triangulating their essence into the policy platform or an honest pitch for why an alternative path is superior.
• Parties that adapt can thrive. Those who keep dismissing ideas outside their perceived Overton window will suffer. Political fortunes can be evaluated through this lens.

• For the week ending 30/Aug, US crude inventories fell by 6.9m barrels, surpassing analysts expectations a 600k barrel drawdown. Distillate stocks surprisingly dropped, while gasoline inventories unexpectedly rose.
• US natural gas inventories rise 13 bcf for the week ending 30/Aug, missing analyst expectations of a 26 bcf buildup. Inventories are 10.7% above the 5-year seasonal average.
• ADNOC to acquire a 35% stake in ExxonMobil’s proposed low-carbon hydrogen facility. BPN Paribas raised the target price on Chevron, while Grupo Santander downgraded TotalEnergies.

• Hello everyone, and welcome back to our weekly positioning watch, now moved to Wednesdays.
• Global macro has truly been a rollercoaster these past few weeks, and market narratives have constantly changed, making it somewhat difficult to navigate.
• Everyone has been juggling around between the growth party and recession stories, and markets have increasingly been leading into cyclical trades after the July NFP dust settled, believing that the signs we saw from the labor market was a one off.

• Over the past weeks, we are beginning to hear more and more talk of Ukrainian President Zelenskyy heading to the US to present a “plan to end the war” like a salesman trying to renew a customer deal for one final term.
• Does this mean that we are looking into an upcoming peace settlement or is Zelenskyy simply grasping after straws?
• In this piece, we’ll try to give you the strategic overview and our forecast of a possible path forward and out of the war, which would have enormous effects on global markets.

• The Central Bank of Chile cut the MPR by 25 basis points to 5.5% in response to slowing economic activity and inflation dynamics, aligning with market expectations again after surprisingly holding the rate steady in July.
• Chile’s financial market mirrored global trends, with falling short- and long-term interest rates and a modest appreciation of the peso. However, credit growth remains weak, especially in the commercial sector.
• Future MPR cuts will likely proceed faster than previously projected, contingent on macroeconomic conditions and inflationary pressures, with the Bank committed to ensuring inflation remains on track to reach 3% over the two-year horizon.