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.

Event-Driven

Kepco Plant Service & Engineering / Event-Driven

<ul>
<li>Nuclear power is a landmark policy that Korea's current administration heavily pushes. In response, the local market has quickly launched nuclear thematic ETFs: KINDEX &amp; HANARO, which got listed today.</li>
<li>Nuclear power is likely to become the next big thing, AUM-wise, similar to the secondary battery-themed ETFs under the former administration.</li>
<li>Since most of these nuclear stocks have significantly smaller market caps than those battery ones, the actual flow impact is likely to be more significant.</li>
</ul>


Nuclear power is a landmark policy that Korea's current administration heavily pushes. In response, the local market has quickly launched nuclear thematic ETFs: KINDEX &amp; HANARO, which got listed today.
Nuclear power is likely to become the next big thing, AUM-wise, similar to the secondary battery-themed ETFs under the former administration.
Since most of these nuclear stocks have significantly smaller market caps than those battery ones, the actual flow impact is likely to be more significant.


Two Nuclear ETFs Listed Today (KINDEX & HANARO): Passive Flow Outlook

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>The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.</li>
<li>The <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">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.</li>
<li>Another week of inflows for the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex-China (EMXC US)</a> ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!</li>
</ul>


The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.
The SSE STAR50 (STAR50 INDEX) and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.
Another week of inflows for the iShares Emerging Markets ex-China (EMXC US) ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!


Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.</li>
<li>We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.</li>
<li>On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.


KOSPI Size Indices - Potential Migrations as Focus Is on Price to Book

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.</li>
<li>Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). </li>
<li>The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.</li>
</ul>


It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for listed government enterprises.
Some of these listed government enterprises rallied strongly today (KEPCO - up 10%; KOGAS - up 12.7%; Korea District Heating - Up 30%). 
The detailed evaluation criteria for management evaluation of government enterprises will include the appropriateness of dividend levels, protection of minority shareholders, and compliance with best practices for ESG improvement.


Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.</li>
<li>We currently see 3 migrations from MidCap to LargeCap, 3 new adds to LargeCap, 6 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.</li>
<li>Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
We currently see 3 migrations from MidCap to LargeCap, 3 new adds to LargeCap, 6 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.


KOSPI Size Indices - The Outperformance Continues

South Korea

KEPCO Engineering & Construction Company, Inc. designs nuclear and conventionally-fueled electricity generating plants.  The Company also provides power plant engineering services and consulting services to power industry.

Kepco Engineering & Construction (052690 KS)

Kepco Engineering & Construction (052690 KS)

Two Nuclear ETFs Listed Today (KINDEX & HANARO): Passive Flow Outlook

This post details Korea's two local nuclear thematic ETFs, which made their market debut today. And it examines their passive flow outlook and the...

Sanghyun Park

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

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

Brian Freitas

KOSPI Size Indices - Potential Migrations as Focus Is on Price to Book

We see 35 migrations and 7 new inclusions for the KOSPI Size indices. Stocks migrating higher have outperformed stocks migrating lower. Some stocks...

Brian Freitas

Inclusion of 'Shareholder Value Improvement' Mgmt Evaluation Reforms for Listed Govt Enterprises

It was reported today in numerous local media that there will be an inclusion of 'shareholder value improvement' management evaluation criteria for...

Douglas Kim

KOSPI Size Indices - The Outperformance Continues

We see 34 migrations and 6 new inclusions for the KOSPI Size indices. Stocks migrating higher have outperformed stocks migrating lower. Some stocks...

Brian Freitas