Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Key insiders at Seoul City Gas (017390 KS) and Daou Data Corp (032190 KS) sold their shares before the recent crash.</li>
<li>On 28 April, it was reported that Kim Young-Min (Seoul City Gas Chairman) sold 2% of Seoul City Gas on 20 April, resulting in net sales of 45.7 billion won.</li>
<li>These Korean companies are two of the eight stocks related to the CFD derivatives sell-down that have been crashing in the past week. </li>
</ul>


Key insiders at Seoul City Gas (017390 KS) and Daou Data Corp (032190 KS) sold their shares before the recent crash.
On 28 April, it was reported that Kim Young-Min (Seoul City Gas Chairman) sold 2% of Seoul City Gas on 20 April, resulting in net sales of 45.7 billion won.
These Korean companies are two of the eight stocks related to the CFD derivatives sell-down that have been crashing in the past week. 


Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash

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>The recent matched order operation's ringleader called in local major broadcasting companies for an interview and claimed the sell orders through SG on Monday were not from their CFD accounts.</li>
<li>The trigger is Kiwoom Securities' Chairman Kim, who created a continuous and rapid decline in stock prices and led to a vicious cycle of endless margin calls and covering orders.</li>
<li>Rather than fishing for a bottom for the eight stocks from this point on, it seems necessary to actively design positions aimed at Kiwoom Securities' legal risk-induced stock price decline.</li>
</ul>


The recent matched order operation's ringleader called in local major broadcasting companies for an interview and claimed the sell orders through SG on Monday were not from their CFD accounts.
The trigger is Kiwoom Securities' Chairman Kim, who created a continuous and rapid decline in stock prices and led to a vicious cycle of endless margin calls and covering orders.
Rather than fishing for a bottom for the eight stocks from this point on, it seems necessary to actively design positions aimed at Kiwoom Securities' legal risk-induced stock price decline.


We Should Aim at Kiwoom Securities' Potential Legal Risk-Induced Stock Price Decline

<ul>
<li>The reduction of credit loans by Korea Investment &amp; Securities and Kiwoom Securities in the past week may have accelerated unwinding of positions of 8 stocks related to CFD selling.  </li>
<li>The balance of credit loans for KOSPI increased 12.7% YTD. On the other hand, the balance of credit loans for KOSDAQ increased by 36.1% YTD. </li>
<li>As local securities companies further reduce credit loans and regulators also restrict CFD related leverage, a sound pair trade could be to go long KOSPI 200 and short KOSDAQ 150. </li>
</ul>


The reduction of credit loans by Korea Investment &amp; Securities and Kiwoom Securities in the past week may have accelerated unwinding of positions of 8 stocks related to CFD selling.  
The balance of credit loans for KOSPI increased 12.7% YTD. On the other hand, the balance of credit loans for KOSDAQ increased by 36.1% YTD. 
As local securities companies further reduce credit loans and regulators also restrict CFD related leverage, a sound pair trade could be to go long KOSPI 200 and short KOSDAQ 150. 


Korea Investment & Securities' Suspension of Credit Loans for Stock Purchases - The Trigger Event?

Equity Bottom-Up

<ul>
<li>The biggest story in the Korean stock market in the past three days has been the crash in 8 stocks related to CFD derivatives.</li>
<li>As a result of the CFD related margin call selling, the following are the major impact on the 8 related stocks and the overall Korean stock market in our view.</li>
<li>They include a) overshooting on the downside on 8 related names, b) negative impact on the major rechargeable battery names, and c) negative impact on the overall Korean stock market. </li>
</ul>


The biggest story in the Korean stock market in the past three days has been the crash in 8 stocks related to CFD derivatives.
As a result of the CFD related margin call selling, the following are the major impact on the 8 related stocks and the overall Korean stock market in our view.
They include a) overshooting on the downside on 8 related names, b) negative impact on the major rechargeable battery names, and c) negative impact on the overall Korean stock market. 


A Crash in 8 Korean Stocks Related to CFD Derivatives: Margin Call in Korea

<ul>
<li>The local ghost hedge fund began to excessively invest in credit, which leveraged 2.5 to 3 times when the eight manipulated stocks started to increase rapidly in price.</li>
<li>Then, the Financial Supervisory Service deemed this excessively-leveraged trading behavior as unusual, and news of an investigation into their activities broke out and triggered them to dump the shares.</li>
<li>The key now is identifying in advance the stocks that will experience similar selling patterns. To do so, we need to prioritize selecting stocks with high-margin balances in recent times.</li>
</ul>


The local ghost hedge fund began to excessively invest in credit, which leveraged 2.5 to 3 times when the eight manipulated stocks started to increase rapidly in price.
Then, the Financial Supervisory Service deemed this excessively-leveraged trading behavior as unusual, and news of an investigation into their activities broke out and triggered them to dump the shares.
The key now is identifying in advance the stocks that will experience similar selling patterns. To do so, we need to prioritize selecting stocks with high-margin balances in recent times.


Matched Order Fraud in Korea: Reason Behind Eight Stocks Hit Massively

South Korea

Daou Data Corp. provides IT consulting & solution service.  The Company wholesales and retails computer hardware and software, such as servers, hard disk drives, CD-ROM drives, anti-virus software, graphic solution software, and multimedia software.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Daou Data Corp (032190 KS)

Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash

Key insiders at Seoul City Gas and Daou Data sold their shares before the recent crash.These Korean companies are two of the eight stocks related...

Douglas Kim

We Should Aim at Kiwoom Securities' Potential Legal Risk-Induced Stock Price Decline

This post investigates the new development of the recent matched order fraud incident and the potential trading opportunities on Kiwoom Securities.

Sanghyun Park

Korea Investment & Securities' Suspension of Credit Loans for Stock Purchases - The Trigger Event?

The reduction of credit loans by Korea Investment & Securities and Kiwoom Securities in the past week may have accelerated unwinding of positions...

Douglas Kim

Matched Order Fraud in Korea: Reason Behind Eight Stocks Hit Massively

This post investigates and explains the matched order fraud incident that engulfed Korea's local stock market this week and the potential names...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash

Key insiders at Seoul City Gas and Daou Data sold their shares before the recent crash.These Korean companies are two of the eight stocks related...

Douglas Kim

We Should Aim at Kiwoom Securities' Potential Legal Risk-Induced Stock Price Decline

This post investigates the new development of the recent matched order fraud incident and the potential trading opportunities on Kiwoom Securities.

Sanghyun Park

Korea Investment & Securities' Suspension of Credit Loans for Stock Purchases - The Trigger Event?

The reduction of credit loans by Korea Investment & Securities and Kiwoom Securities in the past week may have accelerated unwinding of positions...

Douglas Kim

A Crash in 8 Korean Stocks Related to CFD Derivatives: Margin Call in Korea

The biggest story in the Korean stock market in the past three days has been the crash in 8 stocks related to CFD derivatives. We discuss the major...

Douglas Kim

Matched Order Fraud in Korea: Reason Behind Eight Stocks Hit Massively

This post investigates and explains the matched order fraud incident that engulfed Korea's local stock market this week and the potential names...

Sanghyun Park