On the day before the Lunar New Year holiday, so-called "owl disclosures," in which listed companies concentrate unfavorable filings after the market closes, resurfaced.
According to the Financial Supervisory Service's electronic disclosure system on the 18th, a total of 982 disclosures were filed by KOSPI and KOSDAQ-listed companies on the 13th, the trading day before the Lunar New Year holiday. Of these, 548 were KOSPI and 434 were KOSDAQ.
In particular, there were 439 disclosures after the regular session ended at 3:30 p.m. (208 KOSPI and 231 KOSDAQ), accounting for about 45% of the total. This is a sharp increase compared with the day before last year's Chuseok holiday (134) and the day before the Lunar New Year holiday (239).
Owl disclosures refer to the practice of corporations releasing unfavorable information, such as contract terminations or deteriorating earnings, at times when investor attention is low, like the day before a holiday or after the market closes.
In fact, there were not a few disclosures after the market closed that included major contract cancellations or weak results. Bumyang Construction said a 62.6 billion won contract for new apartment construction at Jungoe Park in Gwangju, signed with Korea Real Estate Investment & Trust Co. (KOREIT), was terminated. The amount corresponds to 51.84% of the company's recent annual sales. Earlier, in January, Bumyang Construction applied to begin rehabilitation proceedings, and the court has approved the commencement.
Disclosures of worsening results also followed. Mgen Solutions said it swung to a net loss last year, recording a loss of 16.3 billion won, and SHIN STEEL and The Nature Holdings likewise disclosed that net profit fell by about 80% from a year earlier.
There were also disclosures of valuation losses on derivatives. T-Robotics said an approximately 14.7 billion won valuation loss occurred due to a gap between the conversion prices of bonds with warrants (BW) and convertible bonds (CB) and the share price. This amounts to 15.74% of equity capital.
Experts say investor caution is needed as "owl disclosures" of adverse news ahead of holiday closures are repeated like a custom.
To protect investors, the Korea Exchange (KRX) regards disclosures released after the regular session on the last trading day before a closure of three days or more, or on the year-end closing day, as owl disclosures. The exchange reposts such disclosures on its website on the first trading day immediately after the closure.