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

Korea Stock Exchange Kospi Index / Event-Driven

<ul>
<li>Local sources confirm government's focus on strengthening stock market for April election. Market expects aggressive policies for share cancellations, including corporate defense mechanisms.</li>
<li>Chosun Ilbo, a government-friendly and influential media outlet,  advocates for corporate defense mechanisms to boost share cancellations, shaping a political atmosphere.</li>
<li>This theme is likely to emerge in Korea's market. We must consider political dynamics and screen companies with high treasury shares for potential stock boosts.</li>
</ul>


Local sources confirm government's focus on strengthening stock market for April election. Market expects aggressive policies for share cancellations, including corporate defense mechanisms.
Chosun Ilbo, a government-friendly and influential media outlet,  advocates for corporate defense mechanisms to boost share cancellations, shaping a political atmosphere.
This theme is likely to emerge in Korea's market. We must consider political dynamics and screen companies with high treasury shares for potential stock boosts.


Emerging Korean Investment Theme: Potential Corporate Defense Mechanisms for Share Cancellations

<ul>
<li>Local market information indicates potential collaboration between KRX, FSS, and KSD to create a Korean EquiLend, aiming to centralize the stock lending channel.</li>
<li>Unprecedented globally, President Yoon aims to centralize short selling. The challenge lies in mandating foreign investors to use Korea's platform, necessitating a complex legal framework.</li>
<li>Despite the difficulty, local authorities are compelled to pursue this initiative, raising the likelihood of a Korean EquiLend. Developing strategic plans in response is imperative.</li>
</ul>


Local market information indicates potential collaboration between KRX, FSS, and KSD to create a Korean EquiLend, aiming to centralize the stock lending channel.
Unprecedented globally, President Yoon aims to centralize short selling. The challenge lies in mandating foreign investors to use Korea's platform, necessitating a complex legal framework.
Despite the difficulty, local authorities are compelled to pursue this initiative, raising the likelihood of a Korean EquiLend. Developing strategic plans in response is imperative.


Korea's Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch

<ul>
<li>Concerning the newly imposed 90-day mandatory repayment period for institutional investors, the elimination of the recall risk during this period is not included in this improvement plan.</li>
<li>The right to re-establish the same short-selling position after the 90-day repayment period is unlimited. We should pay attention to the potential of this creating new trading events.</li>
<li>Institutions borrowing stocks from overseas are not subject to the 105% collateral ratio. However, everyone is subject to the 90-day repayment period, even for investors who borrow stocks from overseas.</li>
</ul>


Concerning the newly imposed 90-day mandatory repayment period for institutional investors, the elimination of the recall risk during this period is not included in this improvement plan.
The right to re-establish the same short-selling position after the 90-day repayment period is unlimited. We should pay attention to the potential of this creating new trading events.
Institutions borrowing stocks from overseas are not subject to the 105% collateral ratio. However, everyone is subject to the 90-day repayment period, even for investors who borrow stocks from overseas.


Breaking Down Korean Regulators' Official Details on New Short Selling System

<ul>
<li>There seems to be no immediate requirement to close existing contracts. However, even the chairman of the Financial Services Commission was unable to offer a definitive answer.</li>
<li>The comprehensive investigation and prohibition of the customary naked short selling could lead to a rapid decline in overall market liquidity.</li>
<li>The first is the short-term view, focusing on futures backwardation, and the second is the medium to long-term perspective, examining how the overall market liquidity decline will affect market flows.</li>
</ul>


There seems to be no immediate requirement to close existing contracts. However, even the chairman of the Financial Services Commission was unable to offer a definitive answer.
The comprehensive investigation and prohibition of the customary naked short selling could lead to a rapid decline in overall market liquidity.
The first is the short-term view, focusing on futures backwardation, and the second is the medium to long-term perspective, examining how the overall market liquidity decline will affect market flows.


Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights

ESG Independent Analyst, Who's Good

Emily Jiwon Kim

ESG Independent Analyst

ASIA’S FIRST AI-DRIVEN ESG INSIGHT PROVIDER

Who's Good

Using AI technologies and public data, Who’s Good provides objective and up-to-date corporate ESG insights on Asian companies.

WHY WHO'S GOOD

* Time-sensitive: Time is the essence in finance. Artificial Intelligence (AI) can process vast amount of information in a short span of time. Our powerful algorithm offers real-time in-depth corporate ESG analysis with out compromising its quality.
* Objective: We turned to public big data and news big data as source to base our analysis on and to preserve impartiality. We leverage 350 public big data sources and 93 news data sources in Korea to uncover insights.
* Insightful: Who’s Good ESG analysis coverage extends to all listed and non-listed companies in Korea. This allows us to provide a comprehensive insight into the Korean market.
* Global approach to ESG: Our ESG research framework is built on international standards and principles including UN Global Compact, ISO 26000, ICGN and CFA Guidelines on Corporate Governance to meet the global standards.

<ul>
<li>Our analysis of 23,419 news articles on 2,699 companies reported between Jan 1 and Dec 31, 2021, reveals that a total of 623 companies had incidents related to ESG topics.</li>
<li>167 companies (83.5%) among the 200 largest listed companies (KOSPI 200) were involved in ESG incidents.</li>
<li>Of the 23,419 news articles covering ESG incidents, 17,245 were related to KOSPI 200 companies, accounting for 73.6%.</li>
</ul>


Our analysis of 23,419 news articles on 2,699 companies reported between Jan 1 and Dec 31, 2021, reveals that a total of 623 companies had incidents related to ESG topics.
167 companies (83.5%) among the 200 largest listed companies (KOSPI 200) were involved in ESG incidents.
Of the 23,419 news articles covering ESG incidents, 17,245 were related to KOSPI 200 companies, accounting for 73.6%.


News Analysis on ESG Incidents of 2000+ South Korean Companies (2021)

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)

Korea's Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch

Lee Bok-hyun, head of FSS, discussed progress in short selling computerization publicly yesterday on KBS. He confirmed collaboration between the...

Sanghyun Park

Breaking Down Korean Regulators' Official Details on New Short Selling System

This post breaks down the details of the short selling system improvement measures officially presented by Korean regulatory authorities.

Sanghyun Park

Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights

This post provides a complete transcript of the Korea FSC's briefing and subsequent Q&A session regarding the abrupt short selling ban, accompanied...

Sanghyun Park

News Analysis on ESG Incidents of 2000+ South Korean Companies (2021)

Here, we present insights into a broad spectrum of ESG incidents of Korean companies in 2021, broken down into sectors, companies, and ESG topics...

Emily Jiwon Kim

Emerging Korean Investment Theme: Potential Corporate Defense Mechanisms for Share Cancellations

This post introduces Korea's new investment trend: targeting stocks with high treasury shares for potential share cancellations with the...

Sanghyun Park

Korea's Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch

Lee Bok-hyun, head of FSS, discussed progress in short selling computerization publicly yesterday on KBS. He confirmed collaboration between the...

Sanghyun Park

Breaking Down Korean Regulators' Official Details on New Short Selling System

This post breaks down the details of the short selling system improvement measures officially presented by Korean regulatory authorities.

Sanghyun Park

Full Transcript of Korea FSC Briefing on Sudden Short-Selling Ban, Including Key Trading Insights

This post provides a complete transcript of the Korea FSC's briefing and subsequent Q&A session regarding the abrupt short selling ban, accompanied...

Sanghyun Park

News Analysis on ESG Incidents of 2000+ South Korean Companies (2021)

Here, we present insights into a broad spectrum of ESG incidents of Korean companies in 2021, broken down into sectors, companies, and ESG topics...

Emily Jiwon Kim