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To: James Choi who wrote (34)12/4/1997 2:39:00 AM
From: James Choi  Respond to of 122
 
Can these ADRs be shorted?

Tokyo is down again today. I am concerned about their financial sector and we may see another Yamaichi soon. Seoul is in mixed euphoria of finally getting the money from the IMF, but I expect the problems to deepen before it gets better.

In addition, there is the uncertainty about what it means for Korea to open the market. Will the premium on ADRs be wiped out over night?

In light of these concerns, my tentative conclusion is that it will be better to let these Korean ADRs run up to dizzy heights and then short it. But, the question is, can these be shorted?

James Choi



To: James Choi who wrote (34)12/4/1997 8:37:00 AM
From: Jyoti sharma  Read Replies (1) | Respond to of 122
 
James if foreigners can own up to 50% of a Korean company, the premiums will decline substantially. ADR's will trade more in line with Seoul prices. Japanese ADR's trade more or less at Tokyo prices. I am not an expert on Japan or ADR's. Over the years I bot and sold several ADR,s usually without premiums or discounts. Korea is a special case.


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