Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Event-Driven

<ul>
<li>SamE PREF's relative underperformance compared to ORD has been getting a bit worse lately. And finally, today, it went down below -2.0σ on a 20-day moving average.</li>
<li>This much diversion is the first in recent months, and the pref discount is close to last year's peak. The dividend yield difference is also the widest in recent years.</li>
<li>The current diversion appears to be a byproduct of the SamE overbuying amid the recent market rally, and we should expect a quick reversion.</li>
</ul>

Douglas Kim

Korea/Asia, New Economy, IPOs, Events

<ul>
<li>The debate about whether or not Samsung Life Insurance should sell its stake in Samsung Electronics is being reviewed by the National Assembly once again.</li>
<li>The greater probability event is status quo. The Korean government is not likely to force Samsung Life Insurance to sell its stake in Samsung Electronics in the near term.</li>
<li>Korean government is likely to require Samsung Life Insurance to sell its stake in Samsung Electronics after the Lee family has paid off all their inheritance taxes in 3-4 years.</li>
</ul>

<ul>
<li>One of the key events for Samsung Electronics in 1Q 2023 could be additional selling by Lee Jae-Yong and his family members to pay for inheritance taxes.</li>
<li>Samsung Electronics underperformed significantly versus KOSPI in the first quarter in the past two years.</li>
<li>As the negative issue of inheritance taxes becomes highlighted once again, this could further negatively impact Samsung Electronics and other Samsung affiliate shares. </li>
</ul>

<ul>
<li>FSC's unveiled measures: 1. declare a dividend before determining which shareholder to receive, 2. scrap foreign investor ID, &amp; 3. widen price limit on a listing day &amp; allow "test-the-waters"</li>
<li>These are still drafts, but since they have already been coordinated with the Yoon administration, it is highly likely that they will be implemented in the not-too-distant future.</li>
<li>FSC will disclose detailed plans next month. We should rush to prepare for them, which significantly impacts the increase in foreign investors' trading volume and the IPO pricing.</li>
</ul>

<ul>
<li>The target market size that will be affected by the Default Option is estimated to be ₩92T. Up to 30% of them (₩30T) can flow into single-stock ETFs.</li>
<li>Competing against TDFs, half of this ₩30T is a conservative estimate for single-stock ETFs. Then, up to 40% of the ₩15T becomes the flow size entering the local stock market. </li>
<li>KODEX's Samsung Electronics single-stock ETF may dominate the market. In this case, at least ₩3-4T can flow into Samsung Electronics Ord.</li>
</ul>

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

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Samsung Electronics - 005930 KS

Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today

This post examines the current diversion of Samsung Electronics' preferred shares relative to its ordinary shares and discusses why we should...

Sanghyun Park

When Will Samsung Life Insurance Be Forced to Sell Its Stake in Samsung Electronics by the Govt?

The debate about whether or not Samsung Life Insurance should sell its stake in Samsung Electronics is being reviewed by the National Assembly once...

Douglas Kim

Samsung Electronics: Likely Focus on Inheritance Taxes Again in 1Q 2023

One of the key events for Samsung Electronics in 1Q 2023 could be additional selling by Lee Jae-Yong and his family members to pay for inheritance...

Douglas Kim

Korea FSC: Major Changes in Foreign Investor Registration & IPO Pricing

This post details the significant changes to the local financial market, which FSC unveiled this morning, and discusses ramifications on the market.

Sanghyun Park

Launching Single-Stock ETFs in Korea: Market Flow Impact Analysis

This post investigates the situation surrounding the launch of single-stock ETFs in Korea and its flow impact, particularly on Samsung Electronics.

Sanghyun Park

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