Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>That “Oh sh#t moment” has just struck many investors in US markets</li>
<li>Within Hong Kong , Tech most at risk as investors take profit</li>
<li>Our alternative sector selection  has performed both absolutely and in relative terms</li>
</ul>


That “Oh sh#t moment” has just struck many investors in US markets
Within Hong Kong , Tech most at risk as investors take profit
Our alternative sector selection  has performed both absolutely and in relative terms


Investors Have that “Oh Sh#t Moment” - Part 1:  Hong Kong Strategy

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>With the averaging period for the April rebalance now complete, we forecast just 1 change for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.</li>
<li>Based on the passive assets tracking the index, there will be between 0.8-2.2x ADV to trade in the forecast changes.</li>
<li>The resumption of short selling makes it easier to position for these events. That could also result in the shorts moving a lot ahead of implementation.</li>
</ul>


With the averaging period for the April rebalance now complete, we forecast just 1 change for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
Based on the passive assets tracking the index, there will be between 0.8-2.2x ADV to trade in the forecast changes.
The resumption of short selling makes it easier to position for these events. That could also result in the shorts moving a lot ahead of implementation.


FnGuide Semiconductor Top10 Index Rebalance Preview: Just One Change Likely

Event-Driven

<ul>
<li>Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.</li>
<li>Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.</li>
<li>The <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200 INDEX</a> has outperformed the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a>, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.</li>
</ul>


Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a> is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.</li>
<li>The highest probability of <a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions</a> being added to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI200 Index</a> is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.</li>
<li>Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.</li>
</ul>



DN Solutions (298440 KS) is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.
The highest probability of DN Solutions being added to the KOSPI200 Index is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.
Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.


DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

<ul>
<li>With the averaging period for the April rebalance commencing today, we forecast 2 changes for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.</li>
<li>Based on the passive assets tracking the index, there will be between 0.65-1x ADV to buy in the adds and between 0.5-1.7x ADV to sell in the deletes.</li>
<li>The big rally has taken <a href="https://www.smartkarma.com/entities/gemvax-kael-co-ltd" target="_blank" data-smartkarma-citation="entities:17026:1" rel="noopener">Gemvax &amp; Kael</a> into inclusion zone while underperformance leads to <a href="https://www.smartkarma.com/entities/isc-co-ltd" target="_blank" data-smartkarma-citation="entities:13560:1" rel="noopener">ISC Co</a> and <a href="https://www.smartkarma.com/entities/techwing-inc" target="_blank" data-smartkarma-citation="entities:5735:1" rel="noopener">Techwing</a> dropping out of inclusion zone.</li>
</ul>


With the averaging period for the April rebalance commencing today, we forecast 2 changes for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
Based on the passive assets tracking the index, there will be between 0.65-1x ADV to buy in the adds and between 0.5-1.7x ADV to sell in the deletes.
The big rally has taken Gemvax &amp; Kael into inclusion zone while underperformance leads to ISC Co and Techwing dropping out of inclusion zone.


FnGuide Semiconductor Top10 Index Rebalance Preview: Big Moves Lead to Changes in Forecast

South Korea

The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The Index was developed with a base value of 100 as of January 4, 1980. Note: The preferred shares are excluded in calculating the KOSPI Index from June 14, 2002. 

Korea Stock Exchange Kospi Index (KOSPI INDEX)

Korea Stock Exchange Kospi Index (KOSPI INDEX)

Investors Have that “Oh Sh#t Moment” - Part 1: Hong Kong Strategy

Investors in US markets face a sudden realization, with Hong Kong Tech most vulnerable as profit-taking occurs. Our alternative sector selection...

Rikki Malik

FnGuide Semiconductor Top10 Index Rebalance Preview: Just One Change Likely

Jusung Engineering could replace Wonik IPS in the index next week. Passives need to trade between 0.8-2.2x ADV in the stocks. The resumption of...

Brian Freitas

Korea Short Selling: Off to the Races

Data indicates positioning in different types of trades ranging from index pairs to forecast index deletions and stocks with high forward PEs. Some...

Brian Freitas

DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

DN Solutions could raise up to US$1.08bn, valuing the company at US$3.9bn at the top of the range. Inclusion in global indices depends on the lock...

Brian Freitas

FnGuide Semiconductor Top10 Index Rebalance Preview: Big Moves Lead to Changes in Forecast

Recent price movements reduce the number of potential changes from 3 to 2. Gemvax & Kael has soared over the last week and that makes it an add...

Brian Freitas

Investors Have that “Oh Sh#t Moment” - Part 1: Hong Kong Strategy

​Investors in US markets face a sudden realization, with Hong Kong Tech most vulnerable as profit-taking occurs. Our alternative sector selection...

Rikki Malik

FnGuide Semiconductor Top10 Index Rebalance Preview: Just One Change Likely

Jusung Engineering could replace Wonik IPS in the index next week. Passives need to trade between 0.8-2.2x ADV in the stocks. The resumption of...

Brian Freitas

Korea Short Selling: Off to the Races

Data indicates positioning in different types of trades ranging from index pairs to forecast index deletions and stocks with high forward PEs. Some...

Brian Freitas

DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

DN Solutions could raise up to US$1.08bn, valuing the company at US$3.9bn at the top of the range. Inclusion in global indices depends on the lock...

Brian Freitas

FnGuide Semiconductor Top10 Index Rebalance Preview: Big Moves Lead to Changes in Forecast

Recent price movements reduce the number of potential changes from 3 to 2. Gemvax & Kael has soared over the last week and that makes it an add...

Brian Freitas

Investors in US markets face a sudden realization, with Hong Kong Tech most vulnerable as profit-taking occurs. Our alternative sector selection...