Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Cross Asset Strategy

<ul>
<li>FSS announced that it will relax the requirements for opening a foreign integrated account to allow foreigners to more easily invest in Korean stocks through overseas local securities firms. </li>
<li>On 11 March, Interactive Brokers announced that it invested 15 billion won in Next Securities. So far, IBKR has not formally announced that it will allow trading of Korean stocks.</li>
<li>We expect IBKR to allow trading of Korean stocks in 2025, mainly due to its investment in Next Securities and FSS's announcement today on relaxation of opening foreign omnibus accounts. </li>
</ul>


FSS announced that it will relax the requirements for opening a foreign integrated account to allow foreigners to more easily invest in Korean stocks through overseas local securities firms. 
On 11 March, Interactive Brokers announced that it invested 15 billion won in Next Securities. So far, IBKR has not formally announced that it will allow trading of Korean stocks.
We expect IBKR to allow trading of Korean stocks in 2025, mainly due to its investment in Next Securities and FSS's announcement today on relaxation of opening foreign omnibus accounts. 


FSS to Allow Foreigners to Invest in Korean Stocks Through Overseas Local Securities Firms

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The S&amp;P 500 (SPX) is back to test YTD highs and important resistance in the 5670-5783 range. This is an important target/resistance area we have discussed for weeks.</li>
<li>Using the 2007 SPX topping analog suggests a 2% or less move above the prior all-time high set in July at 5670 before topping, which gives the 5783 number.</li>
<li>As long as SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives,and this is the ideal time to do so.</li>
</ul>


The S&amp;P 500 (SPX) is back to test YTD highs and important resistance in the 5670-5783 range. This is an important target/resistance area we have discussed for weeks.
Using the 2007 SPX topping analog suggests a 2% or less move above the prior all-time high set in July at 5670 before topping, which gives the 5783 number.
As long as SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives,and this is the ideal time to do so.


SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 Is Resistance, 2007 Analog on Track

<ul>
<li>On 13 June, the Korean government announced that it will extend a ban on short selling stocks in Korea until end of March 2025. </li>
<li>For now, the government has not given a 100% go-ahead on the end of the ban on short selling stocks starting 1 April 2025. </li>
<li>However, in our view, the government is likely to allow short selling stocks in Korea once again, sometime in 2Q 2025. </li>
</ul>


On 13 June, the Korean government announced that it will extend a ban on short selling stocks in Korea until end of March 2025. 
For now, the government has not given a 100% go-ahead on the end of the ban on short selling stocks starting 1 April 2025. 
However, in our view, the government is likely to allow short selling stocks in Korea once again, sometime in 2Q 2025. 


Ban on Short Selling Stocks in Korea Extended Until March 2025

<ul>
<li>On 13 December, the FSS announced that foreign investors will be allowed to start purchasing Korean stocks without prior authorization starting this week. </li>
<li>The revised Capital Market Act will start to be implemented on 14 December repealing the time consuming and inconvenient pre-registration system for foreign investors.  </li>
<li>As a result of the Korean government making this change regulatory change, one of the beneficiaries is likely to be Interactive Brokers Group, Inc (IBKR US).</li>
</ul>


On 13 December, the FSS announced that foreign investors will be allowed to start purchasing Korean stocks without prior authorization starting this week. 
The revised Capital Market Act will start to be implemented on 14 December repealing the time consuming and inconvenient pre-registration system for foreign investors.  
As a result of the Korean government making this change regulatory change, one of the beneficiaries is likely to be Interactive Brokers Group, Inc (IBKR US).


Foreign Investors Allowed to Begin Buying Korean Stocks Without Prior Authorization on 14 December

<ul>
<li>We've discussed since late Sept increasing odds of a pullback to confluence of support at 4165-4200/the 200-day MA on SPX, and that if this support holds, it's a normal pullback</li>
<li>Ongoing market dynamics allow us to be even more confident in our unchanged outlook; 4216 was the low for this pullback, with 4200 getting hit overnight (early Wednesday last week).</li>
<li>The broad equity market is not yet out of the woods, but as long as the SPX is above 4165-4200 and the 200-day MA, we are bullish.</li>
</ul>


We've discussed since late Sept increasing odds of a pullback to confluence of support at 4165-4200/the 200-day MA on SPX, and that if this support holds, it's a normal pullback
Ongoing market dynamics allow us to be even more confident in our unchanged outlook; 4216 was the low for this pullback, with 4200 getting hit overnight (early Wednesday last week).
The broad equity market is not yet out of the woods, but as long as the SPX is above 4165-4200 and the 200-day MA, we are bullish.


Growing Confidence That the Lows Are In; 4165-4200/200-Day MA on SPX Remains Key; Buys in Financials

United States

Interactive Brokers Group, Inc. is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures, and foreign exchange instruments.

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Interactive Brokers Group, Inc (IBKR US)

FSS to Allow Foreigners to Invest in Korean Stocks Through Overseas Local Securities Firms

FSS announced today that it will relax the requirements for opening a foreign integrated account to allow foreigners to more easily invest in...

Douglas Kim

SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 Is Resistance, 2007 Analog on Track

$SPX Testing Resistance as Rate Cut Cycle Begins; SPX 5670-5783 is Resistance, 2007 Analog on Track if Below 5783. Still Neutral, prefer to sell...

Vermilion Research

Ban on Short Selling Stocks in Korea Extended Until March 2025

On 13 June, the Korean government announced it will extend a ban on short selling stocks in Korea until end of March 2025. The government is likely...

Douglas Kim

Foreign Investors Allowed to Begin Buying Korean Stocks Without Prior Authorization on 14 December

On 13 December, the FSS announced that foreign investors will be allowed to start purchasing Korean stocks without prior authorization starting...

Douglas Kim

Growing Confidence That the Lows Are In; 4165-4200/200-Day MA on SPX Remains Key; Buys in Financials

Our confidence in our outlook is growing: as long as the $SPX is above 4165-4200 and the 200-day MA, most signs point to this being a normal...

Vermilion Research

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