In today’s briefing:
- Foreign Ownership Limit Stocks in Korea: KT Is Again in the Limelight
- Korea Kolmar Holdings: Shares Cancellation of 17% of Market Cap + Deep Discount to NAV
- Discussing the Currently Widened Pref-Ord Disparity in Korea
Foreign Ownership Limit Stocks in Korea: KT Is Again in the Limelight
- KT’s foreign room has been rising since early September last year. If this trend continues, it will likely approach the inclusion borderline of 15% within a month or two.
- This trend is expected to continue for the time being as the tough relationship between the KT CEO and the government seems unlikely to be resolved in the short term.
- The February inclusion is pretty tight, but May seems like we could be looking out for it.
Korea Kolmar Holdings: Shares Cancellation of 17% of Market Cap + Deep Discount to NAV
- On 10 January, Korea Kolmar Holdings (024720 KS) announced that it plans to cancel 1.1 million shares to be acquired through redemption of redeemable convertible preferred shares.
- Korea Kolmar Holdings currently has a market cap of 314 billion won so this share cancellation represents nearly 17% of its market cap.
- This large shares cancellation should have a positive impact on Korea Kolmar Holdings’ share price. It is also trading at 40% discount to its NAV.
Discussing the Currently Widened Pref-Ord Disparity in Korea
- Many of the PREFERRED shares in Korea entered the short-term oversold territory versus ORDINARY (on a 20-day moving average).
- The liquidity boom that started in the local bond market at the beginning of the year seems to have led to the relative outperformance of ORDINARY.
- We should consider collective trading, which utilizes the oversold condition across the entire PREF zone, rather than an individual approach to a specific PREF at this point.
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