Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>Despite differences in views on the legacy of Abenomics, many people agree that Abenomics played a key role and was a clear tipping point for corporate governance improvements in Japan.</li>
<li>Likewise, we believe Yoonomics will follow similar steps and make significant efforts to improve corporate governance reforms in Korea. </li>
<li>So far in 2023,<strong> CORPORATE ACTIVISM</strong> has been <strong>THE MOST IMPORTANT TOPIC</strong> in Korea's equity markets. </li>
</ul>


Despite differences in views on the legacy of Abenomics, many people agree that Abenomics played a key role and was a clear tipping point for corporate governance improvements in Japan.
Likewise, we believe Yoonomics will follow similar steps and make significant efforts to improve corporate governance reforms in Korea. 
So far in 2023, CORPORATE ACTIVISM has been THE MOST IMPORTANT TOPIC in Korea's equity markets. 


Abenomics Vs Yoonomics: Tipping Points of Corporate Governance Reforms in Japan and Korea

Event-Driven

<ul>
<li>In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.</li>
<li>They include Align Partners Capital Management, KCGI, Flashlight Capital Partners, Truston, and LIFE Asset Management.</li>
<li>Share prices of 15 companies that the corporate activist firms have invested in Korea are up on average 9.7% YTD, outperforming KOSPI which is up 7.1% in the same period.</li>
</ul>


In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.
They include Align Partners Capital Management, KCGI, Flashlight Capital Partners, Truston, and LIFE Asset Management.
Share prices of 15 companies that the corporate activist firms have invested in Korea are up on average 9.7% YTD, outperforming KOSPI which is up 7.1% in the same period.


Five Most Aggressive Corporate Activists Moving the Korean Market: Align, KCGI, FCP, Truston, & LIFE

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>With JB Financial Group gone for Meritz Fire, the next one in line will enter KOSPI 200 in place of Meritz Securities. And the lucky one is DGB Financial.</li>
<li>DGB can expect an inflow of 8.23x ADTV and will face a 2.8x ADTV in one day on March 31.</li>
<li>Given the size of the preemptive flow that JB Financial is currently attracting, we should prepare for DBG to start receiving a similar level of price impact earlier than usual.</li>
</ul>


With JB Financial Group gone for Meritz Fire, the next one in line will enter KOSPI 200 in place of Meritz Securities. And the lucky one is DGB Financial.
DGB can expect an inflow of 8.23x ADTV and will face a 2.8x ADTV in one day on March 31.
Given the size of the preemptive flow that JB Financial is currently attracting, we should prepare for DBG to start receiving a similar level of price impact earlier than usual.


KOSPI 200 Ad Hoc Rebalance for Meritz Securities: DGB Financial Will Be Added

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jb-financial-group-co-ltd" target="_blank" data-smartkarma-citation="entities:16104:1" rel="noopener">Jb Financial Group (175330 KS)</a> will replace <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 &amp; Marine Insurance (000060 KS)</a> in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> at the close on 27 January.</li>
<li>We estimate passive <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> trackers will need to buy 3.494m shares (KRW 36.34bn; 4.04 days of ADV) of <a href="https://www.smartkarma.com/entities/jb-financial-group-co-ltd" target="_blank" data-smartkarma-citation="entities:16104:1" rel="noopener">Jb Financial Group (175330 KS)</a> at the close on 27 January.</li>
<li>
<a href="https://www.smartkarma.com/entities/dgb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:6138:1" rel="noopener">DGB Financial Group (139130 KS)</a> could be added to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a> in April, replacing <a href="https://www.smartkarma.com/entities/meritz-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:19692:1" rel="noopener">Meritz Securities (008560 KS)</a> following its merger with <a href="https://www.smartkarma.com/entities/meritz-financial-group-inc" target="_blank" data-smartkarma-citation="entities:11776:1" rel="noopener">Meritz Financial Group (138040 KS)</a>. </li>
</ul>



Jb Financial Group (175330 KS) will replace Meritz Fire &amp; Marine Insurance (000060 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 27 January.
We estimate passive KOSPI2 INDEX trackers will need to buy 3.494m shares (KRW 36.34bn; 4.04 days of ADV) of Jb Financial Group (175330 KS) at the close on 27 January.

DGB Financial Group (139130 KS) could be added to the KOSPI2 INDEX in April, replacing Meritz Securities (008560 KS) following its merger with Meritz Financial Group (138040 KS). 


KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)

<ul>
<li>On 18 January, the KRX announced rebalance to KOSPI 200 index. The new addition to KOSPI 200 is JB Financial Group and the deletion is Meritz Fire &amp; Marine Insurance.</li>
<li>We expect JB Financial to continue to outperform the market in the first half of this year.</li>
<li>However, we do not expect the sharp appreciation of JB Financial versus the other leading Korean banking stocks post JB Financial's inclusion in KOSPI 200 on 30 January. </li>
</ul>


On 18 January, the KRX announced rebalance to KOSPI 200 index. The new addition to KOSPI 200 is JB Financial Group and the deletion is Meritz Fire &amp; Marine Insurance.
We expect JB Financial to continue to outperform the market in the first half of this year.
However, we do not expect the sharp appreciation of JB Financial versus the other leading Korean banking stocks post JB Financial's inclusion in KOSPI 200 on 30 January. 


KOSPI 200 Rebalance: JB Financial In & Meritz F&M Insurance Out

South Korea

JB Financial Group Co. Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.

Jb Financial Group (175330 KS)

Abenomics Vs Yoonomics: Tipping Points of Corporate Governance Reforms in Japan and Korea

Similar to how Abe left a legacy of significant improvements to corporate governance reforms in Japan, Yoon is also likely to seek a major...

Douglas Kim

Five Most Aggressive Corporate Activists Moving the Korean Market: Align, KCGI, FCP, Truston, & LIFE

In this insight, we discuss the five most aggressive corporate activist firms that have been moving the Korean equity market in the past year.

Douglas Kim

KOSPI 200 Ad Hoc Rebalance for Meritz Securities: DGB Financial Will Be Added

This post details the upcoming ad hoc rebalancing of KOSPI 200 for the departure of Meritz Securities. The replacement will be DGB Financial, which...

Sanghyun Park

KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)

JB Financial will replace Meritz F&M Insurance in the KOSPI200 at the close on 27 Jan. JB is +32% in the last 13 trading days & trades at a higher...

Brian Freitas

KOSPI 200 Rebalance: JB Financial In & Meritz F&M Insurance Out

On 18 January, the KRX announced rebalance to KOSPI 200 index. The new addition to KOSPI 200 is JB Financial Group and the deletion is Meritz Fire...

Douglas Kim