Daily Brief South Korea: Samsung KODEX Autos ETF, E Mart Inc, Hyundai Motor Securities and more

In today’s briefing:

KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing
Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder
Hyundai Motor Securities: FSS Approves A 200 Billion Won Capital Raise + Rising Real Estate PF Risk

KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing

KRX confirmed no immediate changes on KRX Semicon and KRX Autos. The universe will switch from BMI to TMI large and mid-caps, with constituent updates happening in the September rebalancing.
TMI rebalances quarterly, while KRX Semicon and Autos rebalance annually in September. KRX confirmed these indices will use the September TMI rebalancing results.
TMI rebalances quarterly, likely releasing results before KRX Sector Indices, giving a window to predict shifts in KRX Semicon and Autos stocks and position ahead of the sector rebalancing.

E Mart’s Chairman Chung Yong-Jin will receive the entire 10% shares of E Mart held by his mum Lee Myung-Hee.
After this transaction, Chung Yong-Jin will become the largest shareholder in E Mart with a 28.6% stake in the company.
This is likely to positively impact E Mart. In Korea, when the final major ownership stake is transferred, there is often a positive boost to the share price.

On 10 January, it was reported that Hyundai Motor Securities (001500 KS)’s 200 billion won capital increase plan passed the Financial Supervisory Service’s review.
Based on the recent revised report to the FSS, Hyundai Motor Securities disclosed that there is a risk of loss in domestic real estate PF and overseas real estate investment.
The company’s decision to proceed with the capital raise is likely to weaken its share price to below its expected rights offering price of 6,640 won in the coming weeks.

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