In today’s briefing:
- End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022
- CSI KRX China-Korea: Rebalancing Results from KRX & Flow Trading Considerations
- BGF & BGF Retail Pair Trade: Two Sons of BGF Chairman Hong Receive a Combined 20.9% Stake in BGF
- South Korean Banks Screener; Hana Financial in the Positive Spotlight
End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022
- We discuss end of the mandatory lock-up periods for 58 stocks in Korea in December 2022, among which 9 are in KOSPI and 49 are in KOSDAQ.
- These 58 stocks on average could be subject to further selling pressures in December and could underperform relative to the market.
- Among these 58 stocks, the top 5 market cap stocks include HYBE, Kakao Games, WCP, Sillajen, and Duksan Neolux.
CSI KRX China-Korea: Rebalancing Results from KRX & Flow Trading Considerations
- KRX unveiled the rebalancing results of the CSI KRX China-Korea indices for Korean constituents yesterday.
- There is still insufficient evidence data to estimate specific passive impact. The previous rebalancing in June showed no clear correlation between constituent changes and price impact.
- Although it may be risky to trade on this rebalancing, monitoring the correlation of their passive impact at this point, one year after the release, seems worthwhile.
BGF & BGF Retail Pair Trade: Two Sons of BGF Chairman Hong Receive a Combined 20.9% Stake in BGF
- It was announced today that Hong Jung-Guk (eldest son) received a 10.5% stake in BGF Co. (10 million shares) from his father Hong Suk-Jo.
- Hong Jung-Hyeok’s (second son) stake in BGF also increased from 0.03% to 10.5%.
- We like a pair trade between BGF Co (go long) and BGF Retail (go short). The combination of price momentum and valuation favor BGF vs BGF Retail.
South Korean Banks Screener; Hana Financial in the Positive Spotlight
- Six of the seven South Korean banks screen favourably on valuation versus returns metrics to September 2022; we add Hana Financial, to our buy rating on KB Financial
- Hana has undemanding valuations, and improving pre-provision and post-provision returns, it also has sound core capital ratio of close to 13%
- We remain neutral on digital bank KakaoBank where we are deterred by high cost of risk metrics relative to its peers; we continue to seek positive catalysts on this name
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