Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and Korean Air Lines is finally cancelled.</li>
<li>The final decisions by the European and US regulators on whether to pass/block this merger are likely to take place in 4Q 2023. </li>
<li>The higher probability scenarios are for one or both of these regulators to block this deal. As such, KDB will need to come up with Plan B.</li>
</ul>


There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and Korean Air Lines is finally cancelled.
The final decisions by the European and US regulators on whether to pass/block this merger are likely to take place in 4Q 2023. 
The higher probability scenarios are for one or both of these regulators to block this deal. As such, KDB will need to come up with Plan B.


What Is KDB's Plan B for Asiana Airlines?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.</li>
<li>We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.</li>
<li>Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.</li>
</ul>


The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.


KOSPI Size Indices - Plenty of Overlap With Other Index Flows

Equity Bottom-Up

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 3Q 2023.</li>
<li>Of the 38 pair trades, 22 of them involved holdcos outperforming opcos YTD and 16 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 3Q 2023.
Of the 38 pair trades, 22 of them involved holdcos outperforming opcos YTD and 16 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2023

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 38 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos YTD and 17 of them involved opcos outperforming holdcos in the same period.
We highlight 38 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>Once again, the profit from Long Short basket trading has also been significant this time. The returns were quite juicy even if the period is shortened to From-February. </li>
<li>The critical question now is whether the juice remains until the effective date. From what I can see, there is still some juice left.</li>
<li>This is because it is generally observed that the flow trading window for this event tends to continue beyond the effective date.</li>
</ul>


Once again, the profit from Long Short basket trading has also been significant this time. The returns were quite juicy even if the period is shortened to From-February. 
The critical question now is whether the juice remains until the effective date. From what I can see, there is still some juice left.
This is because it is generally observed that the flow trading window for this event tends to continue beyond the effective date.


KOSPI Size Indexes Migrants: Official Results & Price Performances So Far

South Korea

Hanjin KAL Corporation is a holding company. The Company, through its subsidiaries, engages in airline, hotel, and travel related services. Hanjin also invests in real estates.

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Hanjin KAL Corp (180640 KS)

What Is KDB's Plan B for Asiana Airlines?

There have been increasing local news flows about KDB's potential "Plan B" for Asiana Airlines in case the merger between Asiana Airlines and...

Douglas Kim

KOSPI Size Indices - Plenty of Overlap With Other Index Flows

We currently forecast 52 changes for the KOSPI Size Indices. While there are few passive assets tracking these indices, they are used by active...

Brian Freitas

Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 3Q 2023. We highlight 38 pair trades that...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 2Q 2023

In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 2Q 2023. We highlight 38 pair trades that...

Douglas Kim

KOSPI Size Indexes Migrants: Official Results & Price Performances So Far

KRX announced the official results of the KOPSI Size Indexes migration for the March rebalancing. This post offers key takeaways and trading...

Sanghyun Park

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