Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>Samsung Elec &amp; 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.</li>
<li>Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.</li>
<li>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.</li>
</ul>


Samsung Elec &amp; 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.


Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

<ul>
<li>Yesterday, five companies disclosed dividend record dates and amounts. Hyundai Motor set record dates before March futures expired. Hyundai Motor offers single stock futures, presenting arbitrage opportunities.</li>
<li>Daily updates and monitoring of dividend arbitrage spread are crucial. Despite limited English support, KLCA webpage proves effective with prompt updates, simplifying the process.</li>
<li>KLCA webpage offers real-time updates and intuitive layout, ideal for dividend arbitrage trading preparation in the Korean market.</li>
</ul>


Yesterday, five companies disclosed dividend record dates and amounts. Hyundai Motor set record dates before March futures expired. Hyundai Motor offers single stock futures, presenting arbitrage opportunities.
Daily updates and monitoring of dividend arbitrage spread are crucial. Despite limited English support, KLCA webpage proves effective with prompt updates, simplifying the process.
KLCA webpage offers real-time updates and intuitive layout, ideal for dividend arbitrage trading preparation in the Korean market.


Tracking Dividend Record Dates: Hyundai Motor Leads, Best Monitoring Channel Revealed

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>The change in the dividend payment system in Korea in 2024 is likely to result in some attractive <strong>"double dividends"</strong> opportunities.</li>
<li>According to the Korea Exchange, there are seven stocks that have changed their dividend record dates policy last year and also that pay quarterly dividends. </li>
<li>Hyundai Motor (005380 KS) (common) provides a dividend yield of 5.8% and Hyundai Motor (005385 KS) (pref) provides a dividend yield of 9.6% at current prices.</li>
</ul>


The change in the dividend payment system in Korea in 2024 is likely to result in some attractive "double dividends" opportunities.
According to the Korea Exchange, there are seven stocks that have changed their dividend record dates policy last year and also that pay quarterly dividends. 
Hyundai Motor (005380 KS) (common) provides a dividend yield of 5.8% and Hyundai Motor (005385 KS) (pref) provides a dividend yield of 9.6% at current prices.


Timing of Double Dividends Opportunities in Korea

<ul>
<li>K200 futures' yearend contango exceeded expectations, triggering a surge in buy arbitrage. The subsequent selling pressure intensified, with strategic shifts observed in January futures/options, contributing to KOSPI's underperformance this year.</li>
<li>Still, significant closure of K200 futures buy arbitrage should come around March, impacting February or March single-stock futures, potentially introducing substantial contango and suggesting lucrative dividend arbitrage in select stocks.</li>
<li>These 40 K200 constituents, with single-stock futures, are vital for our pioneering dividend arbitrage in Korea, directly influenced by buy arbitrage closures using K200 futures from last year.</li>
</ul>


K200 futures' yearend contango exceeded expectations, triggering a surge in buy arbitrage. The subsequent selling pressure intensified, with strategic shifts observed in January futures/options, contributing to KOSPI's underperformance this year.
Still, significant closure of K200 futures buy arbitrage should come around March, impacting February or March single-stock futures, potentially introducing substantial contango and suggesting lucrative dividend arbitrage in select stocks.
These 40 K200 constituents, with single-stock futures, are vital for our pioneering dividend arbitrage in Korea, directly influenced by buy arbitrage closures using K200 futures from last year.


40 Names for Dividend Arbitrage in 1Q, Marking a Pioneering Initiative in Korea

Equity Bottom-Up

<ul>
<li>We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. </li>
<li>Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.</li>
<li>In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.</li>
</ul>


We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. 
Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.


Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

Hyundai Motor (005380 KS)

Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs

This post intends to flag the imminent likelihood of prioritized buyback and cancellation of preferred shares by Samsung Electronics and Hyundai...

Sanghyun Park

Tracking Dividend Record Dates: Hyundai Motor Leads, Best Monitoring Channel Revealed

Here is the most recent list of companies that have finalized their dividend record date, among those that deferred the yearend dividend record...

Sanghyun Park

Timing of Double Dividends Opportunities in Korea

The change in the dividend payment system in Korea in 2024 is likely to result in some attractive "double dividends" opportunities.

Douglas Kim

40 Names for Dividend Arbitrage in 1Q, Marking a Pioneering Initiative in Korea

This post identifies 40 KOSPI 200 constituents we should target for our pioneering dividend arbitrage initiative in March of this year.

Sanghyun Park

Hyundai Motor: Highest Operating Profit Among All Korean Companies in 2023

In this insight, we discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be...

Douglas Kim