International banks rush to publish ‘sell’ reports on local businesses
























International banks rush to publish ‘sell’ reports on local businesses – Korea Times








































International banks rush to publish ‘sell’ reports on local businesses

Bank of England
Bank of England


IB global research papers decline in influence

By Anna J. Park

Global investment banks have issued a series of reports of ‘selling’ – or opinions of ‘underweighting’ or ‘underperforming’ Korean companies, as they believe company valuations have recently exceeded their substantial values ​​amid the bullish performance of KOSPI.

Goldman Sachs gave an underweight opinion on Hanwha Solutions earlier this month, setting its price target at 40,000 won ($ 35), 10% below its current price at Thursday’s close. The justification for the selling position on the Hanwha subsidiary is based on growing uncertainty due to the low barriers to entry into the solar energy sector, which, according to the bank, means that its profitability must be estimated on a long term period. In view of the growing investments in equipment from competitors, Hanwha Solutions’ stocks must be updated, he insisted.

A recent research paper from Hong Kong-based CLSA suggested “selling” E-mart shares following a negative review of the Shinsegae Group acquisition of eBay Korea. CLSA’s target on E-mart is 139,000 won, down more than 12% from the closing share price of 155,000 won on Thursday.

Major battery companies have also been targeted by major investment banks to receive a mixed reaction. Morgan Stanley has expressed an “underweight” position on Samsung SDI, moving from its previous status of “equal weight” to the Samsung subsidiary on the grounds that battery manufacturers’ profitability is expected to deteriorate amid fierce competition. Despite the sale notice, Samsung SDI’s share price rose 20% in just one month, reaching 732,000 won on Thursday, from 622,000 won at the start of last month.

Credit Suisse was not in favor of LG Chem last month, when it gave an “underperforming” view of the country’s top chemical company. Its research paper claimed that LG Chem’s share price would need to be refreshed, given that its 100% stake in spin-off LG Energy Solution (LGES) would be lowered to 70% with its public offering later this year. year. LG Chem’s share price, however, fell from 814,000 won a month ago to 859,000 won at the close on Thursday.

Bank of England
Bank of England


As research teams from global investment banks continue to publish sales reports on major Korean exporters, in part due to higher valuations amid the recent uptrend in the Korean stock market, the influence of these stock price documents will likely be short lived.

As evidenced by the recent strong stock price performance of Samsung SDI and LG Chem, the impact of underweight reports in the market is limited in the near term, followed by more bullish moves that offset bearish moves stemming from the reports. Some other stock prices even show independent movements, regardless of reports of “underperformance”.

Moreover, this decrease in the influence of major foreign research papers is also attributed to the increased presence of retail investors, who have better access to these research papers when it comes to stock transactions.

“We are seeing increasingly strong performance led by retail investors, who are showing strong buying movements based on their own preferences and trade trend issues,” said a local market observer. “In the past, some companies’ stock prices have plunged 20-30% per day following sales reports from foreign investment banks. However, the impact is limited to a much shorter period, and we have seen that some stock prices go even higher. “


















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