Weiss Korea Opportunity Share Discussion Threads

[davebowler] 16/5/2014 12:29

hxxp://www.weisskoreaopportunityfund.com/documents/FG/weiss/announcements/196005_2014_04_30_Fact_Sheet_-_Final.pdf

[hoveite] 26/4/2014 19:33

Here's a writeup from Ori Eyal of Emerging Value Capital Partners about Korean Prefs. He more or less makes the same investment case as everyone else so the story is definitely out there.



If you don't like the premium and management fees and are feeling adventurous it is always possible to invest in Korean shares directly - although I haven't found a cheap way of doing so with a UK broker so it may end up costing just us much.

[topvest] 25/4/2014 18:44

The talk in the Chairman's Statement about great governance and discount control through the redemption posts, but the fact remains that the 1.5% management fee is too high, so the statement is a bit of a nonsense to me. Still watching as an interesting vehicle, but can't help thinking this will be at a discount one day.

[davebowler] 25/4/2014 15:52

Korea gets a mention twice at the Value Investing Congress;
hxxp://www.marketfolly.com/2014/04/petra-capitals-presentation-on-nexen.html
hxxp://www.marketfolly.com/2014/04/david-hurwitz-on-opportunities-in-korea.html

[praipus] 12/2/2014 15:11

Yep you?

From the NAV statement

"Dividends:

As noted in the Admission Document, dividends from Korean preferred shares are not accounted for or accrued in the NAV until the amount of each dividend is received. As a result of the foregoing, the NAV published above may not reflect all income contractually due to the Company as at the stated NAV date. The Company notes that there are dividends receivable by the Company as at the stated NAV date but such dividends have not yet been received so they are not yet included in NAV. The Company currently has estimates for only a portion of such dividends receivable; such estimated portion would add an additional 1.35 pence per share. Please refer to the Admission Document for more information regarding the announcement and payment of Korean dividends. "

[envirovision] 12/2/2014 14:59

Hi well the yields very low and they are not the same sort of pref that we know over here. I find the fact sheet rather I informative. The investments are all great companies do you hold?

[praipus] 23/1/2014 21:47

27Ben posted this on the WAM thread, interveiw with Andrew Weiss discussing the Korea Oppotunity Fund:-)

[praipus] 23/1/2014 13:20

Hi envirovision, Q&A :-)

1) Have you read the last monthly fact sheet?


2) What is the "Weighted Average Discount of Preferred Shares Held" ?

3) What is the difference between the published NAV and the "see through" NAV?

4) Do you believe Weiss's view's on Korea?

[envirovision] 23/1/2014 13:15

Thats a fair premium to NAV, any reason ?

[davebowler] 23/1/2014 11:10

Daily Funds
23 January 2014
2
Westhouse Securities;
Asian markets are weak again, following soft Chines
e data this morning. Yet this ignores
positive news that the Korean economy grew at its f
astest rate in almost three years in
Q4 2013, led by strong investment. Indeed, growth o
f 3.9% in Q4 came despite
headwinds faced by the Korean economy in terms of a
weaker Japanese Yen.

This was not sufficient to boost the KOSPI this mor
ning, with a decline of over 1%. But it
does highlight that a combination of rising busines
s confidence (with Koreans keen to invest
in new production capacity) amid still solid demand
for Korean exports, rising consumer
demand and accelerated US growth are combining to i
mprove the growth profile of this
particular economy.
It is important to recognise that emerging markets
have never been a homogenous asset
class and the divergence in Korean and Chinese data
highlights this vividly. So, while we live
in a cyclical phase where emerging markets are out
of vogue, the Korean data provide
evidence of an improvement that, if sustained, shou
ld ultimately support equity pricing.

[davebowler] 12/12/2013 13:19

Monthly fact sheet;

[davebowler] 21/11/2013 12:52

Name NAV per share ISIN NAV DATE
(Pence Per
Share)
------------------------ -------------- ------------- -------------------
Weiss Korea Opportunity 110.83 GG00B933LL68 19th November 2013

[davebowler] 11/11/2013 12:10

Monthly Fact sheet;

[davebowler] 04/11/2013 10:01

Investment Week article;

Arbitrage options for equity investors
28 Oct 2013 | 09:21
Kristian Falnes

Categories: Equities | UK

Topics: Skagen | Ubs
equity-release

Kristian Falnes, manager of the SKAGEN Global fund, explains how mispricing across a company's capital structure or an industry sector can deliver gains for shareholders.

Arbitrage, the attempted risk-free exploitation of pricing inefficiencies, is a well-established hedge fund strategy, but there are also opportunities for equity investors to take advantage of market misconceptions which create pricing anomalies.

Although not without risk, investing in an unpopular share class or a misclassified company can present opportunities for those with investment flexibility and a long-term horizon.
Added security

Although there are often differences between countries, in general, preference shares differ from ordinary shares in that they offer investors one or more special rights, the most important of which is that of dividends at a preferred rate over common shareholders.

Another advantage could be that of priority in certain situations. Preference shareholders may be next in line after creditors have made their claim on any remaining assets, in the event of bankruptcy, for example.

In exchange for these additional rights, preference shareholders typically forsake their company voting rights. Nevertheless, for many companies even if you own the ordinary shares, it is questionable whether you would be able to exert any influence over the company.

For example, Samsung Electronics is part of the Samsung conglomerate, a so-called chaebol, which typically have complex ownership structures that limit shareholder influence.

Critics often argue despite being exchange-traded, preference shares are less liquid than ordinary shares because there are fewer in circulation. However, a 2012 research report, The Preferred Way To Add Dividends by Swiss bank UBS, looked at the preference shares issued by 12 companies and concluded, in general, liquidity is good and in some cases, such as Brazilian commodities producer Vale, even better than in ordinary shares.

UBS also found the preference shares in Samsung Electronics and Hyundai Motors, both of which have a reputation for being difficult to trade, change hands on a daily basis.
Higher return

Ultimately, we like preference shares because, on the whole, total shareholder return (capital appreciation plus dividends), is higher. Over the past ten years, for example, Samsung's preference shares have delivered an annualised total return of 23.3%, which is 5.5% higher than the ordinary shares (see graph,below).


Russian gas producer Surgutneftegas tells a similar story. Over the past decade the preference shares have significantly outperformed (17.0% vs 11.6% for the ordinary shares). Preference shares generally have outperformed recently, as investors' hunt for yield has spread to equities from the debt markets.
Looking beyond the cover

We are taught from an early age to not judge books by their covers, but companies are often judged simply according to their Global Industry Classification Standard sector.

Opportunities arise when companies belong to sectors the general market does not understand, or simply does not like. These companies can often surprise on the upside with positive results or take advantage of their depressed valuations by buying back their own shares. In some cases, their cheapness makes them attractive prey to larger peers.

Some companies reinvent themselves or the industries they operate in. Samsung Electronics has long been classified as an IT company based on its traditional semi-conductor business.

But we began to suspect, over a decade ago their development of consumer goods such as phones, TVs, PCs and home appliances would be what they were famous for one day.

Today, almost three-quarters of Samsung's sales come from these products, and yet it is still classified as an IT company. Strangely its peer, LG Electronics, is classified within consumer discretionary; a sector valued more highly by the market at the moment.

Similarly, Chinese PC maker Lenovo is a clear market leader within its industry but if the company continues to take market share in tablets, it could be expected to be reappraised as a consumer goods player rather than an IT company and ascribed a more generous valuation multiple as a result.

This was the case when SCA, the Swedish paper manufacturer, was reclassified from the materials sector to consumer staples, contributing to an expansion in its price/earnings multiple from 10x to 17x.
More than a sum of the parts

Given the number of businesses they often encompass across different sectors, conglomerates are a rich pool of opportunity. Many of them end up being misclassified, and hence misanalysed and undervalued.

Although they are often value-creating, they are generally reasonably priced because the investor base typically frowns upon this type of company structure.

Companies like Turkey's Sabanci and Yazicilar are prime examples of conglomerates which can be picked up at a discount to what their underlying businesses are worth, due to one or more divisions being ignored by analysts and investors.

Then it is just a matter of waiting patiently for the market to realise the value of these business segments and a re-rating of the shares should hopefully follow.

Samsung shares: 10-year total shareholder return

p49-line898

[davebowler] 03/11/2013 18:25

Here is the article;

However, I know that some of you like to buy markets and not individual stocks. Good news then, in that I think the most gripping talk of the day came from Andrew Weiss of Weiss Asset Management. He told us to buy Korea. You have heard this before – David Stevenson wrote about it in Adventurous Investor in May – but to reappraise: amazing infrastructure, fantastic education system and lots of potential cheap labour from enterprise zones bordering North Korea.
Of course, rapid economic growth is entirely irrelevant to stock market returns: high levels of investment and low levels of regard for shareholders mean that high growth economies almost always have low growth stock markets. So what might make Korea different? First it is not starting from too high a price; second, much of the investment is done; and third, there are huge changes to corporate governance under way. These days, corrupt corporate heads actually go to jail and if regulations on the way through now pass, South Korea will soon have the "best shareholder rights in the world". There is also a huge wave of money on its way in from the national pension service, and nothing moves a market like money.
You can buy into this story in a complicated way – getting what Weiss calls a "double discount" by picking up ultra-cheap preference shares (Hyundai's are trading on a p/e of 3.1 times) – or a potentially less lucrative but more simple way with a Korean exchange traded fund but, either way, it is worth considering. I'll be acting on some of the tips from the conference myself in the next few weeks but if you want an even simpler takeaway from the Sohn conference it is this: register to become a bone marrow donor. Slipped into the programme, before the audience had time to head for the door with their BlackBerrys, was a short talk explaining that it does not take that long, will not hurt that much if you turn out to be a match for someone and will show your compassionate side even more than paying £1,000 to attend a conference.

[mangal] 02/11/2013 18:18

Weiss and "ultra-cheap" Korean preference shares get a mention in today's FT-Money.

[davebowler] 22/10/2013 10:53

Extract from this ;
Weighted average discount of shares held -55% (compared to equivalent ord.share)
Average P/E -5.06

[davebowler] 02/10/2013 15:59

Why Fidelity favours Korea as Asia's cheapest market;

hxxp://www.moneymarketing.co.uk/news-and-analysis/asia/why-fidelity-favours-asias-cheapest-market/2001141.article

[davebowler] 04/9/2013 11:39

O.K. I have added the links,Praipus.

[praipus] 04/9/2013 08:16

Hi davebowler,

Any chance you could add the following to the header?

1) Companies website
www.weisskoreaopportunityfund.com

2) ETF covering the main Korean Index?

[praipus] 03/9/2013 14:51

lol (EDIT) Why are you ignoring look through NAV skyship?

[skyship] 03/9/2013 12:46

Now 95% invested, but an 8% premium to NAV looks to be a gross over-valuation...

[jaws6] 08/8/2013 07:25

dave
Thanks for info,small tick up today.