Weiss Korea Opportunity Fund says, during the period from 31 December 2014 to 31 December 2015, the company’s
NAV per share increased by 11.70%, outperforming the reference MSCI Korea 25/50 Capped Index, which returned -1.1% in Sterling terms.
The company paid a dividend of 1.8580 pence per share on 26 June 2015. The Directors intend to return to shareholders all dividends received, net of withholding tax, on an annual basis. Typically for South Korean companies, shareholders of record near the end of the calendar year are entitled to a single annual dividend. However, the dividends are generally not announced or paid to shareholders until several months into the following calendar year. The Board has decided to schedule payment of the company’s annual dividend distributions in the early summer. This timing helps ensure that dividends are paid out as soon as is reasonably practical after the company receives them.
On a total return basis the NAV return was 12.0% for the year. As of 31 December 2015, the weighted average discount of preferred shares held was 36.0%, compared with 37.6% as of 31 December 2014. Samsung, one of the largest holdings, has been repurchasing its preference shares and these now stand at a 15% discount to the ordinary shares. The managers see this as a good sign as Samsung is one of Korea’s largest companies and so its actions could be imitated by others.
The largest investment was in the preference shares of Hyundai Motors at 19% of assets under management at 31 December 2015. The investment in Hyundai Motors is cumulative across its three classes of preference shares, all
of which have similar economic entitlements. At the end of 2015, the least liquid class was trading at roughly a 33% discount to the price of the ordinary shares (compared to a 30% discount for those shares at the end of 2014). The
other two classes of Hyundai preference shares are trading at around 30% discounts. Hyundai has announced long term plans to significantly increase its dividend and to set up an independent committee of the company’s outside
directors with one of them tasked exclusively with helping protect shareholder interests. The manager belies these actions are bullish for the long term prospects of the Hyundai preference shares.
WKOF : Weiss Korea Opportunity benefits from Samsung buy-backs