In today’s briefing:
- Korean Policy Tailwinds: Preferred Shares Rerating Play
- Hyosung Heavy (298040 KS): Positioning Not Extreme as Index Inclusion Nears
Korean Policy Tailwinds: Preferred Shares Rerating Play
- Most expect prefs to be in policy crosshairs soon—watch for tighter rules on dividends, discounts, and liquidity, plus likely incentives for redemption or cancellation ahead of commons.
- If Korea rolls out a pref stock overhaul, long-biased rerate plays could pop—focus on liquid, high-yield large-cap prefs trading at 35%+, yield north of 3%, and solid daily turnover.
- Korea Inv, Kumho Petro, CJ Cheil, CJ Corp prefs already screen well; Doosan and Hanwha 3PB could join if dividend hikes materialize on back of strong sub earnings.
Hyosung Heavy (298040 KS): Positioning Not Extreme as Index Inclusion Nears
- In an all too familiar sight across a range of stocks across a range of markets, Hyosung Heavy Industries‘ stock price has doubled over the last 3 months.
- The increased market cap should result in index inclusion and passive trackers are estimated to buy 358k shares (US$291m; 4.5x ADV) at the close on 26 August.
- Hyosung Heavy has outperformed most peers over the last few months but still trades at reasonable relative valuations. Positioning does not appear excessive relative to peers.
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