Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul>
<li>There has been a sharp increase in unsold housing units in Korea. There were 68k unsold housing units in Korea at the end of 2022, up 278% YoY</li>
<li>Unsold housing units is likely to get worse in Korea in the coming months driven by higher housing units supply, stubbornly high interest rates, and increasing probability of global recession. </li>
<li>We believe there is a sound trading opportunity of shorting a basket of large construction stocks including Hyundai E&amp;C, GS E&amp;C, and Daewoo E&amp;C over the next 6-12 months.</li>
</ul>


There has been a sharp increase in unsold housing units in Korea. There were 68k unsold housing units in Korea at the end of 2022, up 278% YoY
Unsold housing units is likely to get worse in Korea in the coming months driven by higher housing units supply, stubbornly high interest rates, and increasing probability of global recession. 
We believe there is a sound trading opportunity of shorting a basket of large construction stocks including Hyundai E&amp;C, GS E&amp;C, and Daewoo E&amp;C over the next 6-12 months.


A Sharp Increase in Unsold Housing Units in Korea: A Trading Opportunity

Cross Asset Strategy

<ul>
<li>Sri Lanka defaulted on its debt for the first time in its history.</li>
<li>South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies entering Sri Lanka are Korean companies.</li>
<li>Other emerging/frontier market countries including Turkey, Pakistan, South Africa, Russia, Ukraine, Belarus, El Salvador, Lebanon, Ethiopia, Ghana, Kenya, Egypt, Tunisia and Peru also face potential debt defaults. </li>
</ul>


Sri Lanka defaulted on its debt for the first time in its history.
South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies entering Sri Lanka are Korean companies.
Other emerging/frontier market countries including Turkey, Pakistan, South Africa, Russia, Ukraine, Belarus, El Salvador, Lebanon, Ethiopia, Ghana, Kenya, Egypt, Tunisia and Peru also face potential debt defaults. 


Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

<ul>
<li>Yoon Suk-Yeol was elected the new President of South Korea on 10 March.</li>
<li>As the next President of South Korea, Yoon will certainly try to increase much needed housing supply and this will certainly benefit the major construction companies in Korea.</li>
<li>Another major sector that will likely benefit as a result of Yoon becoming the President is the nuclear industry.</li>
</ul>


Yoon Suk-Yeol was elected the new President of South Korea on 10 March.
As the next President of South Korea, Yoon will certainly try to increase much needed housing supply and this will certainly benefit the major construction companies in Korea.
Another major sector that will likely benefit as a result of Yoon becoming the President is the nuclear industry.


Yoon Suk-Yeol Becomes the New President of South Korea

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>Based on prices and turnover from 17 July, there could be 5 additions and 1 deletion for the index in July. Plus there will be capping and float changes.</li>
<li>Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$840m. There are many stocks with multiple days of ADV to trade.</li>
<li>The index is currently trading 34% below its highs but near a zone from where it has bounced in the past.</li>
</ul>


Based on prices and turnover from 17 July, there could be 5 additions and 1 deletion for the index in July. Plus there will be capping and float changes.
Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$840m. There are many stocks with multiple days of ADV to trade.
The index is currently trading 34% below its highs but near a zone from where it has bounced in the past.


Solactive Global Uranium & Nuclear Components Index Rebalance Preview: 5 Adds, 1 Delete Possible

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Since the last rebalancing on 19th May our Model Portfolio declined 0.7% while MXASJ appreciated 1.48%. Since inception, our portfolio has appreciated 41.6% and MXASJ has moved up 45.8%.</li>
<li>With renewed geopolitical uncertainty, we highlight long-term preferences on AI picks and shovels, Chinese exporters with overseas supply chains. The former now translates to increased focus on power, materials industrials.</li>
<li>With China's domestic consumption in doldrums, we exclude Alibaba and trim the weights of all consumer and consumer proxies. We include Geely, Weichai Power, Zhongji Innolight, Posco and CG Power. </li>
</ul>


Since the last rebalancing on 19th May our Model Portfolio declined 0.7% while MXASJ appreciated 1.48%. Since inception, our portfolio has appreciated 41.6% and MXASJ has moved up 45.8%.
With renewed geopolitical uncertainty, we highlight long-term preferences on AI picks and shovels, Chinese exporters with overseas supply chains. The former now translates to increased focus on power, materials industrials.
With China's domestic consumption in doldrums, we exclude Alibaba and trim the weights of all consumer and consumer proxies. We include Geely, Weichai Power, Zhongji Innolight, Posco and CG Power. 


Asian Equities: Model Portfolio - Leaning More Towards Power, Materials, Industrials

South Korea

Hyundai Engineering & Construction Co., Ltd., a general construction company, provides civil engineering, architectural, industrial, and electrical engineering services.  The Company constructs roadways, dams, bridges, ports, industrial plants, apartment complexes, and cultural facilities.

Hyundai Engineering & Construction (000720 KS)

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

Hyundai Engineering & Construction (000720 KS)

A Sharp Increase in Unsold Housing Units in Korea: A Trading Opportunity

We believe there is a sound trading opportunity of shorting a basket of large construction stocks including Hyundai E&C, GS E&C, and Daewoo E&C...

Douglas Kim

Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

Sri Lanka defaulted on its debt for the first time in its history. South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies...

Douglas Kim

Yoon Suk-Yeol Becomes the New President of South Korea

Yoon Suk-Yeol was elected the new President of South Korea on 10 March. Can he become the first ever hero President in South Korea, in the likes of...

Douglas Kim

Solactive Global Uranium & Nuclear Components Index Rebalance Preview: 5 Adds, 1 Delete Possible

There could be 5 adds and 1 delete for the index in July. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$840m. The index...

Brian Freitas

Asian Equities: Model Portfolio - Leaning More Towards Power, Materials, Industrials

Our Model Portfolio underperformed MXASJ since last rebalancing. We add power, industrials & basic material as AI proxies & Chinese exporters with...

Manishi Raychaudhuri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A Sharp Increase in Unsold Housing Units in Korea: A Trading Opportunity

We believe there is a sound trading opportunity of shorting a basket of large construction stocks including Hyundai E&C, GS E&C, and Daewoo E&C...

Douglas Kim

Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

Sri Lanka defaulted on its debt for the first time in its history. South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies...

Douglas Kim

Yoon Suk-Yeol Becomes the New President of South Korea

Yoon Suk-Yeol was elected the new President of South Korea on 10 March. Can he become the first ever hero President in South Korea, in the likes of...

Douglas Kim

Solactive Global Uranium & Nuclear Components Index Rebalance Preview: 5 Adds, 1 Delete Possible

There could be 5 adds and 1 delete for the index in July. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$840m. The index...

Brian Freitas

Asian Equities: Model Portfolio - Leaning More Towards Power, Materials, Industrials

​Our Model Portfolio underperformed MXASJ since last rebalancing. We add power, industrials & basic material as AI proxies & Chinese exporters with...

Manishi Raychaudhuri

Our Model Portfolio underperformed MXASJ since last rebalancing. We add power, industrials & basic material as AI proxies & Chinese exporters with...