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.

Event-Driven

<ul>
<li>TPG and Anchor experienced EOD risk due to the recent plunge in Kakao Bank's stock price. So, they will sell shares if the current price rise continues a little further.</li>
<li>All three PEs of Shinhan Financial are currently expected to be seeking an early exit although they expressed last year that they would remain strategic shareholders.</li>
<li>Other notable targets are Hahn &amp; Co's Hanon Systems and K Car and MBK Partners' ConnectWave, likely via a phased stake sale in tranches.</li>
</ul>


TPG and Anchor experienced EOD risk due to the recent plunge in Kakao Bank's stock price. So, they will sell shares if the current price rise continues a little further.
All three PEs of Shinhan Financial are currently expected to be seeking an early exit although they expressed last year that they would remain strategic shareholders.
Other notable targets are Hahn &amp; Co's Hanon Systems and K Car and MBK Partners' ConnectWave, likely via a phased stake sale in tranches.


Potential Block Deal Targets in Korea for a Preemptive Position Buildup

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>On 2 January, Align Partners Capital Management (APCM) started to go activist on seven leading Korean banking group companies.</li>
<li>According to APCM, the major Korean banking groups could pay out at least half of their net income to their shareholders, which would be more than double the current levels.</li>
<li>Korean banks are trading at deep discount to global peers, now trading at PBR of 0.2~0.4x whereas global peers trade at 1.3x. </li>
</ul>


On 2 January, Align Partners Capital Management (APCM) started to go activist on seven leading Korean banking group companies.
According to APCM, the major Korean banking groups could pay out at least half of their net income to their shareholders, which would be more than double the current levels.
Korean banks are trading at deep discount to global peers, now trading at PBR of 0.2~0.4x whereas global peers trade at 1.3x. 


Align Partners Goes Activist on Seven Banking Group Companies in Korea

<ul>
<li>
 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.</li>
<li>Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.</li>
<li>These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.</li>
</ul>



 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.
Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.
These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.


TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

Index Rebalance

<ul>
<li>Names with a significant impact: <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT (030200)</a>, <a href="https://www.smartkarma.com/entities/shinhan-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:6978:1" rel="noopener">Shinhan Financial (055550)</a>, <a href="https://www.smartkarma.com/entities/korean-air-lines-co-ltd" target="_blank" data-smartkarma-citation="entities:11048:1" rel="noopener">Korean Air (003490)</a>, <a href="https://www.smartkarma.com/entities/lg-energy-solution" target="_blank" data-smartkarma-citation="entities:33464:1" rel="noopener">LG Energy (373220)</a>, <a href="https://www.smartkarma.com/entities/dongwon-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:1783:1" rel="noopener">Dongwon Industries (006040)</a>, <a href="https://www.smartkarma.com/entities/lotte-fine-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:507:1" rel="noopener">Lotte Fine Chemical (004000)</a>, <a href="https://www.smartkarma.com/entities/meritz-fire-marine-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:20468:1" rel="noopener">Meritz Fire (000060)</a>, &amp; <a href="https://www.smartkarma.com/entities/mirae-asset-daewoo-co-ltd-b50c4d95-1687-46cb-9b58-f79ce0e72670" target="_blank" data-smartkarma-citation="entities:12061:1" rel="noopener">Mirae Asset (006800)</a> </li>
<li>Limiting the target size of our flow trading to only the fund size that directly mirrors it (₩17.8T) on T-1 Effective will increase our winning rate.</li>
<li>Lately, local pensions have been seen as rather taking advantage of flow trading in index rebalancing events, so I also recommend keeping the trading window fairly tight.</li>
</ul>


Names with a significant impact: KT (030200), Shinhan Financial (055550), Korean Air (003490), LG Energy (373220), Dongwon Industries (006040), Lotte Fine Chemical (004000), Meritz Fire (000060), &amp; Mirae Asset (006800) 
Limiting the target size of our flow trading to only the fund size that directly mirrors it (₩17.8T) on T-1 Effective will increase our winning rate.
Lately, local pensions have been seen as rather taking advantage of flow trading in index rebalancing events, so I also recommend keeping the trading window fairly tight.


KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective

<ul>
<li>We have seven constituents of KOSPI 200, which are subject to a float rate adjustment due to major shareholder stake sales and lockup release in the upcoming rebalancing in December</li>
<li>In terms of passive impact x ADTV, LG Energy Solution, KT Corp, and Shinhan Financial are expected to receive the most attention from flow traders.</li>
<li>The preemptive setups of flow traders will likely be more inclined toward these float rate changes since this December rebalance will have the lowest number of constituent changes ever.</li>
</ul>


We have seven constituents of KOSPI 200, which are subject to a float rate adjustment due to major shareholder stake sales and lockup release in the upcoming rebalancing in December
In terms of passive impact x ADTV, LG Energy Solution, KT Corp, and Shinhan Financial are expected to receive the most attention from flow traders.
The preemptive setups of flow traders will likely be more inclined toward these float rate changes since this December rebalance will have the lowest number of constituent changes ever.


KOSPI 200 Index Review: Names Subject to Float Rate Adjustment

South Korea

Shinhan Financial Group Co., Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.  The company's main businesses include banking, securities brokerage, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Shinhan Financial (055550 KS)

Potential Block Deal Targets in Korea for a Preemptive Position Buildup

This post screens potential block deal targets in Korea, which we should consider a preemptive position buildup in the short-term.

Sanghyun Park

Align Partners Goes Activist on Seven Banking Group Companies in Korea

On 2 January, Align Partners Capital Management (APCM) started to go activist on seven leading Korean banking group companies.

Douglas Kim

TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

This post screens four names to trade at the TIGER Top 10 ETF rebalancing in December based on FnGuide's latest float rates, and discusses trading...

Sanghyun Park

KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective

This post details the official results of the KOSPI 200 up/down weights and examines the passive impacts on T-1 Effective, which is December 8.

Sanghyun Park

KOSPI 200 Index Review: Names Subject to Float Rate Adjustment

This post investigates the names subject to a free float rate adjustment in the upcoming rebalancing of the KOSPI 200 in December.

Sanghyun Park

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