In today’s briefing:
- Fresh, Highly Noteworthy Newsflow Hits the HMM Tender
- KT&G: Increasing Probability of a Cigarette Price Hike in the Next 6-12 Months
Fresh, Highly Noteworthy Newsflow Hits the HMM Tender
- Minister Jin, Busan’s sole ruling-party lawmaker, gives his out-of-the-blue remarks significant political weight, making the local-government HMM stake plan materially more likely than mere weekend chatter.
- Fresh newsflow shifts the tender hedge narrative: Jin’s remark likely nudges KOBC toward skipping, while KDB is locked in.
- KOBC’s tender decision and Jin’s remarks could flip post-tender bias, raising hedge difficulty; a cautious approach is needed, monitoring price action and exposure risk before stepping in.
KT&G: Increasing Probability of a Cigarette Price Hike in the Next 6-12 Months
- A cigarette price hike has been long overdue in Korea. The last time there was cigarette price hike in Korea was more than 10 years ago.
- We believe that the Korean government could raise cigarette prices to about 7,000 won to 8,000 won per pack from current price of 4,500 won in the next 6-12 months.
- Raising cigarette prices could improve the sharp shortfall in government tax revenues.
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