In today’s briefing:
- Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
- Samsung Elec & Hyundai Motor’s high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt’s Corporate Value Up policy.
- Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.
- Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.
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