In today’s briefing:
- Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
- KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
- Hanwha Ocean’s share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won.
- Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months.
- We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments.
KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
- The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
- We see 7 migrations from MidCap to LargeCap, 6 migrations from LargeCap to MidCap, 7 new adds to MidCap, and 17 migrations from SmallCap to MidCap.
- Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.
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