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Share Name Share Symbol Market Type Share ISIN Share Description
Weiss Korea Opportunity Fund Ltd. LSE:WKOF London Ordinary Share GG00B933LL68 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.50 -0.79% 189.50 185.00 194.00 189.50 184.50 189.50 0.00 08:00:16
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.0 8.9 9.6 19.7 163

Weiss Korea Opportunity Share Discussion Threads

Showing 26 to 50 of 175 messages
Chat Pages: 7  6  5  4  3  2  1
DateSubjectAuthorDiscuss
02/6/2013
10:11
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/d8200930-c772-11e2-9c52-00144feab7de.html#ixzz2V34Bunoj The second is much more esoteric. It's the Weiss Korea Opportunity Fund, a small recent issue from US fund manager Weiss that focuses on Korean preferred shares, and recently raised £105m on the Alternative Investment Market to invest in such securities. I can't imagine that you've heard much about this unique opportunity, as no one I know has a thing for South Korean equities of the normal ilk, let alone their preferred cousins. That's a shame. This market – still officially classed an emerging market by MSCI – is currently trading at close to single-digit PE ratios, with valuations on some counts even lower than Chinese shares. The market is dominated by conservatively run conglomerates known as chaebols, which are quite insular and often connected with each other through cross-shareholdings. As well as the ever-present tension with North Korea, these companies have suffered lately because of "Abenomics"; in the battle for exports, a weaker yen, it is reasoned, will benefit the likes of Toyota and Sony at the expense of Hyundai and Samsung. But if you thought the ordinary equity of Korean companies was under-valued, just take a look at their preferred shares. Preferred shares are common in Korea. They allow a dominant shareholder to raise fresh money without giving away management control. The term "preferred" is a misnomer, as you're no higher up in a company's capital structure than the ordinary shareholders. What you do get is fewer voting rights. Basically, they're disenfranchised common equities, and that lowly status is reflected in the preferred share prices, which trade at monumental discounts to NAV. Weiss observes that Hyundai's common stock trades at 5.5 times its estimated profits for 2013, with a yield of 0.9 per cent, but its preferred stock trades at around twice earnings, with a yield of around 2.5 per cent depending on which issue you buy into. So, here's the bet: very cheap stocks, in a cheap market, with poor governance and a risk that North Korea could zap it all tomorrow.
davebowler
01/6/2013
10:55
WKOF gets a mention in this weeks "Adventurous Investor" column in the FT. http://www.ft.com/cms/s/0/d8200930-c772-11e2-9c52-00144feab7de.html#axzz2Ut7LBlTi
hoveite
30/5/2013
11:13
Yes, interesting. Not sure investing at this price is sensible though. Looks like we have missed the boat!
topvest
30/5/2013
10:43
Name NAV per share ISIN NAV DATE (Pence Per Share) ------------------------ -------------- ------------- ------------ Weiss Korea Opportunity 103.34 GG00B933LL68 28 May 2013 Fund Ltd. ------------------------ -------------- ------------- ------------ NAV is up 5% since float.
davebowler
30/5/2013
10:41
The obvious parallel is Japan for their currency depreciation which h as been outweighed by their share price rises ,Yieldsearch so I think the lack of hedge is fine. http://www.ft.com/cms/s/3/b00144f2-c77a-11e2-9c52-00144feab7de.html#axzz2UldkXmon Interesting article.Thanks.
davebowler
30/5/2013
08:57
Lex FT article on korean prefs shares ( "Korean anomalies: updating preferences" ). also any thoughts on #4 above?
yieldsearch
29/5/2013
08:16
Yes, it winds up in 4 years so the exit is clear enough so even if it becomes an orphan fund the share buyback plus limited life should take care of it.
davebowler
28/5/2013
20:37
I've taken a look at this, but will give it a miss for now. Three things concern me; the premium valuation, the Weiss AM fee is double what is should be (i.e. 1.5% per annum); and this has all the hallmarks of being an orphan fund in a few years time. Of course, Weiss may have found a great investment opportunity, but I'm not 100% sure as although preference shares are undervalued they don't appear to offer a meaningful yield. Any thoughts?
topvest
28/5/2013
15:49
That's a great find and a succinct summary hoveite; Light and Heat at the Ira Sohn Conference By Alon Bochman, CFA Categories: Alternative Investments "One cool judgment is worth a thousand hasty counsels. The thing to do is to supply light and not heat." – Woodrow T. Wilson. "When you can't make them see the light, make them feel the heat." – Ronald Reagan I had the pleasure of attending the 18th Annual Sohn Investment Conference in New York on 8 May 2013. Sohn has been called the "Super Bowl of investor conferences" because it consistently attracts the brightest hedge fund luminaries, as well as some of their most moneyed followers (tickets run up to $100,000 a head). This was my first time attending Sohn. As I entered the regal Avery Fisher Hall at Lincoln Center, I felt a bit like Nick Carraway entering Jay Gatsby's mansion: Fund managers in impeccably tailored suits exchanged pleasantries while meticulously coiffed waiters served gluten-free quinoa salad. As the conference started, feature presentations from Bill Ackman, Steve Eisman, Jim Chanos, and others were interspersed with videos from the Sohn Conference Foundation seeking funding for pediatric cancer research. There was even a short but entertaining magic show from Oz Pearlman. As a professional investor, I was primarily interested in the investment presentations (although who can resist a good magic show), but I found the format problematic. When your talk is projected on a giant screen to an audience of a several thousand, spectacle trumps subtlety. This, I suppose, is a problem endemic to all investment conferences, so it might not be fair to blame the Sohn Foundation. In the end, it is up to us as investors to focus on the light and ignore the heat. The most valuable presentation, in my opinion, was also the least loud and least well-covered by the press. Li Lu, one of the student leaders of the Tiananmen Square protest in China and now chairman of Himalaya Capital, spoke without the aid of slides about a large group of securities that is mispriced by a wide margin: South Korean preferred shares trade at a 25–88% discount to their common equity counterparts while offering substantially the same or better cash flows. While Korean preferreds lack voting rights, they pay dividends equal to the common dividend plus a spread. They also receive preference in liquidation, so under any scenario, going concern or bankruptcy, they offer a superior cash flow stream. Korean preferreds were originally issued several decades ago when the government pressured chaebols to raise more equity and delever their capital structures. The chaebols wanted the extra equity capital, but they also wanted to retain control of their companies - hence the new non-voting shares. Li pointed out that one of the reasons for the discount is that Korean preferreds are poorly understood and largely ignored by the sell side. Managements tend to exclude them from earnings-per-share (EPS) calculations in public filings and thus have little or no incentive to buy them back (and capture the discount) because it would not improve EPS. This situation is similar to the option compensation issue in the United States (before tech companies were forced to expense options granted to employees, they had little incentive to curb those grants because they did not affect net income). EPS calculation rules are changing since Korea adopted new accounting rules in 2011. The new rules require that all outstanding shares, including preferreds, be counted in the EPS calculation. The large discount between common and preferred shares in Korea is a glaring market inefficiency and a black eye for the country's financial regulators, who are eager to show improvements in corporate governance - long an Achilles' heel of the Korean market. So, there is some pressure to rectify the mispricing. I should note at this point that I am somewhat biased toward Li's investment idea because Korean preferred shares constituted a large part of the Asian equity portfolio I managed for a New York hedge fund in my prior job. That is, I had done the work before and was in a position to recognize the presentation's value. The reaction of the audience at large, however, was polite silence. One contemporaneous tweet read, "I have no idea what Li Lu is talking about." Indeed.
davebowler
28/5/2013
13:12
Here is an account of a presentation Li Lu gave recently pitching the idea that Korean preference shares are undervalued - i.e. the same investment rationale that this fund has. http://blogs.cfainstitute.org/insideinvesting/2013/05/14/light-and-heat-at-the-ira-sohn-conference/ It goes against the grain to buy anything at a premium to NAV, but I like Weiss and Korean preference shares seem like a potentially interesting asset class so I've bought some of these.
hoveite
24/5/2013
16:46
Thanks for trying.
davebowler
24/5/2013
15:41
dave Soryy did not find link for that artical.
jaws6
24/5/2013
14:22
Worth re-stating; Midas Investment Management research; Weiss have a proven track record, with average annualised net returns of 16.5 per cent since inception in 1991. They specialise in deep value and invest globally in discounted assets, working to exit these assets at narrower discounts. They believe one of the most attractive and mispriced investment opportunities in the world right now is the Korean Preference Share market. Preference shares in Korea are currently trading at an average 65 per cent discount to their ordinary counterpart, with the main difference being they are non-voting (voting - in any event offers little advantage in Korea). The fund will have no performance fee and will offer a full exit at Formula Asset Value ("FAV") after 4 years and every 2 years thereafter. There will be a 40 per cent annual share buyback in place from the beginning to avoid a discount. At Midas, we like Korea and analysts believe that they may be the next country to embark on a round of Quantitative Easing ("QE"). Market watchers will have seen the gains in the stock markets of countries undertaking QE plus Korea is one of the cheapest valuation developed markets. Midas called the Thailand and Indonesia's markets well and now we believe Korea is the market of opportunity in Asia. The fund also has an implied forecast dividend yield of between 2 and 3 per cent.
davebowler
24/5/2013
14:12
DB - thnx for the intro - being an ardent fan of WEISS I've bought a few and also added them to the Header charts on the SL thread.
skyship
18/5/2013
12:02
I like the Establishment Trust too.http://uk.advfn.com/cmn/fbb/thread.php3?id=27736915
davebowler
18/5/2013
11:54
I still can't find the Standard article jaws6. Did you find it?
davebowler
17/5/2013
13:54
small tick up
jaws6
17/5/2013
12:29
any fund you like other then Milton who picked up this from RNS here ?
jaws6
17/5/2013
11:54
dave hope you read that.
jaws6
17/5/2013
11:01
Any chance of a link to the article jaws6?
davebowler
17/5/2013
09:58
dave Great work.g luck.saw artical in standard yesterday on this.
jaws6
17/5/2013
09:34
Thanks davebowler I've added a link to here from the WAM thread. And a WKOF chart to post_3 on the WAM thread. For those that dont know I track Weiss and other systematic value investors holdings RNS on the WAM thread:) http://uk.advfn.com/cmn/fbb/thread.php3?id=24182742
praipus
16/5/2013
22:24
interesting but it seems that they dont hedge the currency risk back to gbp? if Korea is doing QE, one would expect the local currency to depreciate against foreign and therefore potential gain on the pref share could be negated by the change in FX rate? But i guess i would have more faith in any asian currency than any europeans.. Also not familiar with Korean pref non pref.. if voting shares offers little advantage in korea, why on earth local people are buying voting shares when they could buy at a deep discount the prefs?
yieldsearch
15/5/2013
13:29
In other words, how to buy Korean shares at 35p in the £!
davebowler
15/5/2013
13:28
Midas Investment Management research; Weiss have a proven track record, with average annualised net returns of 16.5 per cent since inception in 1991. They specialise in deep value and invest globally in discounted assets, working to exit these assets at narrower discounts. They believe one of the most attractive and mispriced investment opportunities in the world right now is the Korean Preference Share market. Preference shares in Korea are currently trading at an average 65 per cent discount to their ordinary counterpart, with the main difference being they are non-voting (voting - in any event offers little advantage in Korea). The fund will have no performance fee and will offer a full exit at Formula Asset Value ("FAV") after 4 years and every 2 years thereafter. There will be a 40 per cent annual share buyback in place from the beginning to avoid a discount. At Midas, we like Korea and analysts believe that they may be the next country to embark on a round of Quantitative Easing ("QE"). Market watchers will have seen the gains in the stock markets of countries undertaking QE plus Korea is one of the cheapest valuation developed markets. Midas called the Thailand and Indonesia's markets well and now we believe Korea is the market of opportunity in Asia. The fund also has an implied forecast dividend yield of between 2 and 3 per cent.
davebowler
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