Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

The top 10 events impacting the Korean stock market, economy, &amp; politics in February 2020 were as follows:1) COVID-19 2) M&amp;A FIGHT FOR HANJIN KAL3) 30% CAP RULE FOR SAMSUNG ELECTRONICS/KOSPI 2004) LOTTE SHOPPING RESTRUCTURING 5) DOOSAN HEAVY INDUSTRIES RESTRUCTURING 6) OCI DISCONTINUES SOLAR POLYSILICON PRODUCTION IN KOREA 7) LEMON IPO<a href="https://www.smartkarma.com/insights/trading-strategy-for-lemon-ipo-post-pricing" target="_blank" data-smartkarma-citation="insights:36767" rel="noopener"></a>8) STRONG OUTPERFORMANCE OF EV RECHARGEABLE BATTERY RELATED COMPANIES9) JNTC IPO Demand<a href="https://www.smartkarma.com/insights/trading-strategy-for-jntc-ipo-post-pricing" target="_blank" data-smartkarma-citation="insights:36844" rel="noopener"></a>10) SURGE IN E-COMMERCE DUE TO CORONAVIRUS<div class="content-highlight">Our model portfolio was up 0.7% on a net basis in February 2020 (cash was 60% of our model portfolio), outperforming KOSPI which was down 6.2% in the same period. We are increasing cash to 70% of the total model portfolio starting in March so we are very defensive in our portfolio. </div>

The top 10 events impacting the Korean stock market, economy, &amp; politics in February 2020 were as follows:1) COVID-19 2) M&amp;A FIGHT FOR HANJIN KAL3) 30% CAP RULE FOR SAMSUNG ELECTRONICS/KOSPI 2004) LOTTE SHOPPING RESTRUCTURING 5) DOOSAN HEAVY INDUSTRIES RESTRUCTURING 6) OCI DISCONTINUES SOLAR POLYSILICON PRODUCTION IN KOREA 7) LEMON IPO8) STRONG OUTPERFORMANCE OF EV RECHARGEABLE BATTERY RELATED COMPANIES9) JNTC IPO Demand10) SURGE IN E-COMMERCE DUE TO CORONAVIRUSOur model portfolio was up 0.7% on a net basis in February 2020 (cash was 60% of our model portfolio), outperforming KOSPI which was down 6.2% in the same period. We are increasing cash to 70% of the total model portfolio starting in March so we are very defensive in our portfolio. 

Korea Stock Market Monthly Recap #45 (February 2020)

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>There are 17 inclusions and 17 exclusions for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> at the December rebalance to be implemented at the close on 14 December.</li>
<li>While most of the inclusions were expected, there are many differences on the deletes. Trading the strategy becomes tougher with the short sell ban in place.</li>
<li>The adds have started to outperform the deletes over the last month and there could be more movement over the next 3 weeks to implementation.</li>
</ul>


There are 17 inclusions and 17 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance to be implemented at the close on 14 December.
While most of the inclusions were expected, there are many differences on the deletes. Trading the strategy becomes tougher with the short sell ban in place.
The adds have started to outperform the deletes over the last month and there could be more movement over the next 3 weeks to implementation.


KOSDAQ150 Index Rebalance: 17 Changes a Side; Many Surprises

Event-Driven

<ul>
<li>This article discusses the potential inclusions and exclusions of KOSDAQ150 rebalance in December 2023 (especially those that are highlighted by the locals).</li>
<li>The potential inclusion candidates include Lunit, Shinsung Delta Tech, and JNTC. The eight potential inclusion candidates are up on average 122% YTD, sharply outperforming KOSDAQ in the same period. </li>
<li>Stocks that are expected to be excluded in the KOSDAQ150 index include Aju IB Investment, HFR, Danal, and Sangsangin.</li>
</ul>


This article discusses the potential inclusions and exclusions of KOSDAQ150 rebalance in December 2023 (especially those that are highlighted by the locals).
The potential inclusion candidates include Lunit, Shinsung Delta Tech, and JNTC. The eight potential inclusion candidates are up on average 122% YTD, sharply outperforming KOSDAQ in the same period. 
Stocks that are expected to be excluded in the KOSDAQ150 index include Aju IB Investment, HFR, Danal, and Sangsangin.


KOSDAQ150 Rebalance in December 2023 Highlighted by Locals

<ul>
<li>
<a href="https://www.smartkarma.com/entities/l-f-co-ltd" target="_blank" data-smartkarma-citation="entities:14300:1" rel="noopener">L&amp;F Co Ltd (066970 KS)</a> has applied to the KRX for a transfer from the KOSDAQ market to the KOSPI market.</li>
<li>Based on history, the approval for the transfer and the listing change could take place some time in December.</li>
<li>
<a href="https://www.smartkarma.com/entities/l-f-co-ltd" target="_blank" data-smartkarma-citation="entities:14300:1" rel="noopener">L&amp;F (066970 KS)</a> will not be short-sell eligible for 6 months or longer. That means short covering prior to index deletion and a possible overshoot in the stock price.</li>
</ul>



L&amp;F Co Ltd (066970 KS) has applied to the KRX for a transfer from the KOSDAQ market to the KOSPI market.
Based on history, the approval for the transfer and the listing change could take place some time in December.

L&amp;F (066970 KS) will not be short-sell eligible for 6 months or longer. That means short covering prior to index deletion and a possible overshoot in the stock price.


L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer

<ul>
<li>The coming week has a lot of review periods ending - <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a>, <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext</a> and <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX</a>, among others.</li>
<li>The <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">TOPIX</a> rebalance will be implemented on Monday while the <a href="https://www.smartkarma.com/entities/global-x-lithium-battery-tech-etf" target="_blank" data-smartkarma-citation="entities:32745:1" rel="noopener">Global X Lithium &amp; Battery Tech ETF (LIT US)</a> and IDX indices will rebalance at the close on Tuesday.</li>
<li>There were outflows from Emerging Market ETFs including <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM)</a>, <a href="https://www.smartkarma.com/entities/ishares-core-msci-emerging-mar" target="_blank" data-smartkarma-citation="entities:32967:1" rel="noopener">iShares Core Emerging Mar (IEMG),</a> <a href="https://www.smartkarma.com/entities/schwab-emerging-markets-equi" target="_blank" data-smartkarma-citation="entities:32879:1" rel="noopener">Schwab Emerging Markets Equi (SCHE)</a> and <a href="https://www.smartkarma.com/entities/ishares-edge-msci-min-vol-emerging-markets-etf" target="_blank" data-smartkarma-citation="entities:725:1" rel="noopener">IShares Edge Min Vol Emerging Markets ETF (EEMV)</a>.</li>
</ul>


The coming week has a lot of review periods ending - KOSPI 200, KOSDAQ 150, CSI 300, CSI 500, SSE50, STAR50, ChiNext and SENSEX, among others.
The TOPIX rebalance will be implemented on Monday while the Global X Lithium &amp; Battery Tech ETF (LIT US) and IDX indices will rebalance at the close on Tuesday.
There were outflows from Emerging Market ETFs including iShares Emerging Markets (EEM), iShares Core Emerging Mar (IEMG), Schwab Emerging Markets Equi (SCHE) and IShares Edge Min Vol Emerging Markets ETF (EEMV).


Index Rebalance & ETF Flow Recap: KS200, KQ150, Yuanta Div+, LIT, HSCI, IDX, Japan Positioning

South Korea

JNTC Co.,Ltd operates electronics production businesses. The Company manufactures and sells mobile connectors, batteries, SIM sockets, and other electronics. JNTC conducts businesses across worldwide.

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JNTC (204270 KS)

Korea Stock Market Monthly Recap #45 (February 2020)

The top 10 events impacting the Korean stock market, economy, & politics in February 2020 were as follows:1) COVID-19 2) M&A FIGHT FOR...

Douglas Kim

KOSDAQ150 Index Rebalance: 17 Changes a Side; Many Surprises

There are 17 changes a side for the KOSDAQ150 in Dec. Most of the inclusions were on expected lines, but there are many difference among the...

Brian Freitas

KOSDAQ150 Rebalance in December 2023 Highlighted by Locals

This article discusses the potential inclusions and exclusions of KOSDAQ150 rebalance in December 2023 (especially those that are highlighted by...

Douglas Kim

L&F (066970 KS): Index Implications of KOSDAQ to KOSPI Transfer

LnF could move from the KOSDAQ to KOSPI market in Dec. That means deletion from the KOSDAQ150 in Dec and a potential inclusion in the KS200 in...

Brian Freitas

Index Rebalance & ETF Flow Recap: KS200, KQ150, Yuanta Div+, LIT, HSCI, IDX, Japan Positioning

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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