News & market time with Park Hae-rin, a reporter from the Securities Department.
Reporter Park, last week was a bad week for our stock market.
How was your day?
A lot of people must have struggled with their hearts last week.
Still, today was a successful day for many stocks to rebound.
Last Friday, the KOSPI was threatened to reach the 3,050 level, but today it has risen about 1% and is approaching the 3,100 level again.
You can check the chart showing that the KOSDAQ index is also gaining strength again until the Thousands Daq recovery.
Many people seem to be expecting a rebound from now on.
How is it.
Opinions are divided as to whether this is the beginning of a rebound or not.
First of all, if we summarize the opinions of those who think it is good to expect a rebound,
Today, the Korea Customs Service announced the amount of exports from the 1st to the 20th of this month, showing an increase of more than 40% compared to last year.
The number of working days was one more day than last year, and even taking this into account, it is a 31.5% increase compared to last year.
Exports have been increasing for 9 consecutive months from November last year to July of this year, and this month is also an all-time strong export trend.
Those who expect the stock market to recover predict that as exports are showing such an increase, the uncertainty in the Korean economy and semiconductor industry will also subside.
At this rate, exports are expected to increase for the 10th consecutive month.
Yes, but those who think that it is better to wait a little while are in the position to check the results of the big event this week and set up an investment strategy.
The Bank of Korea Monetary Policy Committee scheduled for the 26th and the US Federal Reserve’s Jackson Hole meeting scheduled for the 27th local time.
It is an explanation that it is necessary to pay attention to whether the BOK will raise or freeze interest rates at this MPC meeting, and whether a specific schedule will be announced at the Jackson Hole meeting for early tapering.
Reporter Park, among these, what stood out in our stock market today?
This is SK.
SK rose more than 4% today as foreign buying came in.
The stock price soared as SK Holdings, the holding company of the SK Group, announced that it would merge with SK Materials, a subsidiary of semiconductors and secondary battery materials.
What will happen if we merge?
SK Materials will set up a new corporation by physically splitting the business divisions such as special gas, and the surviving holding business division will be merged with SK.
SK plans to proceed with the merger by issuing new shares and exchanging them for SK Materials shares.
This is a method in which 1.58 SK common stocks are allocated for each SK Materials common stock.
When will the merger take place?
It is scheduled to be concluded on December 1 after the Materials Shareholders’ Meeting and SK Board of Directors on October 29.
If all goes according to schedule, the new shares of the merged company will be listed on December 27th.
It is rather complicated, in that the business division is physically split to establish a new corporation, and the surviving holding business division is merged with SK.
Why is SK doing this?
The cause is to improve management efficiency and maximize shareholder value.
In order for SK Materials to become the No. 1 company in the global advanced materials field, SK’s professional investment capabilities must be combined.
How do you view the securities industry?
First, speaking of SK, as revealed in today’s share price, there are high expectations for the corporate value to rise.
Some view that SK’s holding company discount will be resolved.
Yuanta Securities analyzed, “Considering that the value of SK Materials was discounted by about 65% from the market price and was reflected in SK’s market cap, it will have a positive effect on the stock price.”
He also analyzed that “through this merger, it will be completely reborn as a business holding company and synergy with its subsidiary SK Hynix, etc.”
Samsung Securities said, “It is advantageous for SK to make a larger investment compared to SK Materials.”
A lot of people are wondering here.
SK Materials’ stock price today also fell during the day.
Although it turned to an uptrend, it was only half compared to the increase in SK stock.
There are opinions that both share prices are positive, but some analysts say that the actual benefits of SK Materials will be negligible.
KTB Investment & Securities judged that “SK directly reflects the value of SK Materials’ subsidiaries, but the attractiveness of investment in SK Materials, the largest IT materials company in Korea, is diluted.”
He also analyzed, “Considering the business weight and dilution effect, investing in SK as an IT material is also burdensome.”
What do those who see SK Materials’ stock price as positive?
We paid attention to the fact that the annual dividend increases by 2.85 times from 4,000 won to 11,850 won when SK Materials’ stock is converted to SK.
You also mentioned that the ratio of this merger is 1:1.58.
As the merger approaches, Samsung Securities believes that arbitrage trading will be possible at 1.58 times the SK stock price.
Kiwoom Securities also analyzed, “If the stock price of SK Materials moves differently from the stock price of SK, risk-free arbitrage opportunities arise.”
In other words, if you look at the closing price as of today, SK is 270,000 won and SK Materials is 425,000 won.
According to the merger ratio, the value of SK’s stock price multiplied by 1.58 should be the stock price of SK Materials, so it will move together with the SK stock price according to this ratio.
It can be interpreted that this is the reason why the ratio was almost matched at the close of the market today.
That’s a good tip.
Good to hear. It was with Park Hae-rin, a reporter from the Securities Department.