The twin themes
In Korea, it was good to see the second set of amendments to the Commercial Act passed on 25 August. Listed companies with assets exceeding two trillion won will now have to adopt cumulative voting, making it dramatically easier for minority shareholders to get at least one candidate onto the board. ... more
Taking care of business
Korea’s President Lee is a month into his term, and so far he has remained admirably focused on promoting the “KOSPI 5000” agenda. ... more
0.8x
A bill submitted by Korea’s ruling Democratic Progressive Party with the firm support of the incoming president could have a significant impact on the valuations of certain listed companies.
It seeks to remove the incentive for major shareholders deliberately to depress their companies’ share prices around succession events. ... more
Election result
The result of the Korean presidential election came in just as this newsletter went to press. Metrica was pleased to see Lee Jae-myung win the race by a comfortable margin. Mr. Lee’s campaign platform included a large number of pledges to improve Korea’s corporate governance and stock market functioning, including: ... more
Japanese MBOs and parent-subsidiary listings
It is proving to be a very busy year for Asia-Pacific M&A, with the number of deals on track to exceed 300, comfortably exceeding the previous peak of 242 (figure below). Hong Kong, Singapore and Japan have shown the greatest leaps in activity, with run rates of 3.5x, 3.0x and 2.1x the post-2009 average, respectively. ... more
A pathway to stability
The long-awaited impeachment trial verdict in Korea is due the day after this newsletter goes to press. ... more
Korea reform
Korea’s government and main opposition party continue to push their respective stock market and corporate governance reform agendas. The vice-chairman of the Financial Services Commission (FSC) appeared at several conferences in February to highlight the government’s continued commitment to “Value-up”. On one measure – share buybacks – Value-up is already proving to be a success, with Korean companies increasing buybacks by 72.8% year-on-year to $9.8 billion in 2024. However, both the FSC and Korea Exchange want to boost the number of listed firms releasing general Value-up plans beyond the current 114. ... more
Korea stewardship code
In line with our continued commitment to the Asian markets and our dedication to fulfilling our stewardship responsibilities, we have initiated the process of registering Metrica as a participant in the Korea Stewardship Code. ... more
Seeds of doubt
RV spreads have been drifting wider since May 2024, and on one measure – the ratio between MSCI Value and Growth indices – levels are now back to multi-year extremes (figure below). ... more
Looking ahead
Event-driven outlook
We begin 2025 with a survey of current opportunities in Metrica’s core strategies.
Firstly, in the event-driven (hard catalyst) strategy, one of the key performance drivers is the liquidity of the target universe, as it correlates with the frequency and depth of trading opportunities. ... more