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 commenced on 1 June and will end on 31 August.</li>
<li>Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.</li>
<li>Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.</li>
</ul>


The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.
Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.


KOSPI Size Indices: Overlaps Between Active & Passive Flows

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jul 4th. The aggregated holding was USD622.6bn.</li>
<li>We estimate that foreign flows to be outflows of USD704mln. We tabulates the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, Naver, Hyundai Rotem.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jul 4th. The aggregated holding was USD622.6bn.
We estimate that foreign flows to be outflows of USD704mln. We tabulates the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Samsung Electronics, SK Hynix, Naver, Hyundai Rotem.


KRX Foreign Holding Weekly (Jul 4th): Samsung Electronics, SK Hynix, Naver, Hyundai Rotem

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>Mandatory treasury cancellation isn’t in the current bill, but FSC and MOJ have started internal reviews; enforcement decree could drop as early as Q4.</li>
<li>An internal policy paper suggests mandatory cancellation will apply only to newly acquired treasury shares, with tight limits on existing ones to curb owner control abuse.</li>
<li>Lack of retroactive cancellation weakens the bull case, and while holdco sentiment stays upbeat, momentum may fade, opening the door to a tactical pullback.</li>
</ul>


Mandatory treasury cancellation isn’t in the current bill, but FSC and MOJ have started internal reviews; enforcement decree could drop as early as Q4.
An internal policy paper suggests mandatory cancellation will apply only to newly acquired treasury shares, with tight limits on existing ones to curb owner control abuse.
Lack of retroactive cancellation weakens the bull case, and while holdco sentiment stays upbeat, momentum may fade, opening the door to a tactical pullback.


Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>In this insight, we also provide a list of 30 top performing stocks in KOSPI in the past one week (in terms of price performance and trading value).</li>
<li>We also discuss the surging share price of Samsung Life Insurance which suggests a near-term regulation change that could require the company to partially dispose its stake in Samsung Electronics. </li>
<li>With Lee Jae-Myung becoming the new South Korean President, the probability of Samsung Life Insurance being forced to sell its stake in Samsung Electronics has risen much more.</li>
</ul>


In this insight, we also provide a list of 30 top performing stocks in KOSPI in the past one week (in terms of price performance and trading value).
We also discuss the surging share price of Samsung Life Insurance which suggests a near-term regulation change that could require the company to partially dispose its stake in Samsung Electronics. 
With Lee Jae-Myung becoming the new South Korean President, the probability of Samsung Life Insurance being forced to sell its stake in Samsung Electronics has risen much more.


Top 30 Best Performing Stocks in KOSPI in Past Week and Surging Price of Samsung Life Insurance

Equity Bottom-Up

<ul>
<li>“In the next 50 years... we won’t give a thought to selling those [Japanese trading companies].... Japan’s record has been extraordinary.” (Warren Buffett)</li>
<li>In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies. </li>
<li>Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, debt/equity ratio, ROIC, and valuations. </li>
</ul>


“In the next 50 years... we won’t give a thought to selling those [Japanese trading companies].... Japan’s record has been extraordinary.” (Warren Buffett)
In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies. 
Japanese trading companies have higher points for market cap, ROE, DPS increase, and shares cancellation. Korean holdcos have higher points for dividend yield, debt/equity ratio, ROIC, and valuations. 


Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos

South Korea

Hanwha Corporation imports and exports petrochemicals, machinery, automotives, electronics, and steel.  The Company also produces explosives for the defense and construction industries.  In addition, Hanwha manufactures automotive airbag inflators and telecommunication equipment, such as wireless phones and provides financial services through its subsidiaries.

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Hanwha Corporation (000880 KS)

KOSPI Size Indices: Overlaps Between Active & Passive Flows

There could be 53 migrations for the KOSPI Size Indices in Sep. Among new listings, there could be 1 LargeCap add and 3 MidCap adds. There are 2...

Brian Freitas

KRX Foreign Holding Weekly (Jul 4th): Samsung Electronics, SK Hynix, Naver, Hyundai Rotem

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in Samsung Electronics, SK Hynix, Naver, Hyundai Rotem.

Ke Yan, CFA, FRM

Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation

This post covers the tactical pullback risk in Korea holdco rerating momentum, driven by the setback from non-retroactive mandatory treasury...

Sanghyun Park

Top 30 Best Performing Stocks in KOSPI in Past Week and Surging Price of Samsung Life Insurance

In this insight, we also provide a list of 30 top performing stocks in KOSPI in the past one week and the surging share price of Samsung Life...

Douglas Kim

Shareholder Returns of Japanese Trading Companies Invested By Buffett Vs Top Korean Trading/Holdcos

In this insight, we provide detailed comparisons of the five major Japanese trading companies and five major Korean holdcos/trading companies.

Douglas Kim

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