Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>On 28 November, the Korean National Assembly reached an agreement on a tax reform plan to officially lower taxes on dividends income. </li>
<li>The decline in tax on dividends is a definite step in the right direction. Nonetheless, the top bracket dividend tax rate cut was slightly less than what market was expecting. </li>
<li>Given that about 15%-25% dividend tax rates are more common in other developed countries,  Korea's reduction of dividend taxes is likely to be welcomed highly by many global investors.</li>
</ul>


On 28 November, the Korean National Assembly reached an agreement on a tax reform plan to officially lower taxes on dividends income. 
The decline in tax on dividends is a definite step in the right direction. Nonetheless, the top bracket dividend tax rate cut was slightly less than what market was expecting. 
Given that about 15%-25% dividend tax rates are more common in other developed countries,  Korea's reduction of dividend taxes is likely to be welcomed highly by many global investors.


Top Bracket Dividend Tax Rate Lowered to 30% in Korea [Moderately Positive]

<ul>
<li>Democratic Party lawmaker Kim Hyun-jung has introduced a revised Income Tax Act that would lower the top tax rate on dividend income from 35% to 25%.</li>
<li>Given that this proposal is coming from the ruling Democratic Party, there is a fairly high probability that this could be passed into law in 3Q 2025.</li>
<li>We provide a list of 28 mid-cap/large cap stocks in Korea with more than 35% dividend payout and 3% or more dividend yield that could benefit from this new proposal.</li>
</ul>


Democratic Party lawmaker Kim Hyun-jung has introduced a revised Income Tax Act that would lower the top tax rate on dividend income from 35% to 25%.
Given that this proposal is coming from the ruling Democratic Party, there is a fairly high probability that this could be passed into law in 3Q 2025.
We provide a list of 28 mid-cap/large cap stocks in Korea with more than 35% dividend payout and 3% or more dividend yield that could benefit from this new proposal.


Separate Dividend Tax Plan in Korea: A Push for a 25% Rate for Top Bracket

Index Rebalance

<ul>
<li>I provide an update of the potential KOSPI200 rebalance candidates in December 2026.</li>
<li>The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in December 2026. These 10 stocks are down on average 24.5% YTD vs KOSPI (up 56.1%).</li>
<li>I also provide five potential inclusion candidates which are up on average 57.6% YTD. </li>
</ul>


I provide an update of the potential KOSPI200 rebalance candidates in December 2026.
The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in December 2026. These 10 stocks are down on average 24.5% YTD vs KOSPI (up 56.1%).
I also provide five potential inclusion candidates which are up on average 57.6% YTD. 


An Early Look at the Potential KOSPI200 Rebalance Candidates in December 2026

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Hyundai Construction Equipment / Index Rebalance

Hyundai Construction Equipment (267270 KS)

<ul>
<li>With over 90% of the review period complete, there could be 4 constituent changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a>  in June.</li>
<li>The changes are driven mainly by the direct deletions with balancing adds to maintain the number of index constituents at 200.</li>
<li>The forecast adds have outperformed the forecast deletes over the last few months, but the gap has narrowed in the last few weeks. Positioning will pick-up in the near term.</li>
</ul>


With over 90% of the review period complete, there could be 4 constituent changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)  in June.
The changes are driven mainly by the direct deletions with balancing adds to maintain the number of index constituents at 200.
The forecast adds have outperformed the forecast deletes over the last few months, but the gap has narrowed in the last few weeks. Positioning will pick-up in the near term.


KOSPI200 Index Rebalance Preview: Positioning Expected to Pick Up

<ul>
<li>This insight provides an update on the KOSPI 200 rebalance candidates in June 2026. </li>
<li>I provide 8 potential deletion candidates including Asia Holdings (002030 KS), Miwon Specialty Chemical (268280 KS), and Green Cross Holdings (005250 KS). </li>
<li>These 8 stocks are down on average 8.4% in the past six months, significantly underperforming KOSPI which is up 54.1% in the same period. </li>
</ul>


This insight provides an update on the KOSPI 200 rebalance candidates in June 2026. 
I provide 8 potential deletion candidates including Asia Holdings (002030 KS), Miwon Specialty Chemical (268280 KS), and Green Cross Holdings (005250 KS). 
These 8 stocks are down on average 8.4% in the past six months, significantly underperforming KOSPI which is up 54.1% in the same period. 


An Update on the KOSPI 200 Rebalance Candidates in June 2026

South Korea

Seoul Guarantee Insurance Company provide insurance services. The Company offers claims adjusting, insurance plans, credit guarantee, loss prevention services, insurance exchanges, claims processing, self insurance funds, and other services. Seoul Guarantee Insurance conducts businesses in South Korea.

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Seoul Guarantee Insurance (031210 KS)

Top Bracket Dividend Tax Rate Lowered to 30% in Korea [Moderately Positive]

On 28 November, the Korean National Assembly reached an agreement on a tax reform plan to officially lower taxes on dividends income.

Douglas Kim

Separate Dividend Tax Plan in Korea: A Push for a 25% Rate for Top Bracket

The final decision to lower top bracket dividend tax from 35% to 25% could be made in the next several days. There have been increasing local news...

Douglas Kim

An Early Look at the Potential KOSPI200 Rebalance Candidates in December 2026

I provide an update of the potential KOSPI200 rebalance candidates in December 2026. The 10 deletion candidates are down on average 24.5% YTD vs...

Douglas Kim

KOSPI200 Index Rebalance Preview: Positioning Expected to Pick Up

The 4 forecast adds have outperformed the forecast deletes and there has been a big move in the stocks over the last month. With the review period...

Brian Freitas

An Update on the KOSPI 200 Rebalance Candidates in June 2026

This insight provides an update on the KOSPI 200 rebalance candidates in June 2026. Eight potential deletions are down on average 8.4% in the past...

Douglas Kim

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