Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>WISE Secondary Cell rebalances every quarter in January, April, July, and October. The effective date for the upcoming rebalancing is April 15.</li>
<li>The flow impact/price correlation of small/mid-caps is shown to be at a meaningful level. Therefore, we may need to design long/short basket trading setups focusing on these small/mid-caps.</li>
<li>The following five stocks are expected to have a significant level of flow impact at this point: SKC, Soulbrain, Youlchon Chemical, Posco Chemical, and LG Energy Solution.</li>
</ul>


WISE Secondary Cell rebalances every quarter in January, April, July, and October. The effective date for the upcoming rebalancing is April 15.
The flow impact/price correlation of small/mid-caps is shown to be at a meaningful level. Therefore, we may need to design long/short basket trading setups focusing on these small/mid-caps.
The following five stocks are expected to have a significant level of flow impact at this point: SKC, Soulbrain, Youlchon Chemical, Posco Chemical, and LG Energy Solution.


WISE Secondary Cell (TIGER ETF) Rebalancing Preview

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Nickel price was the catalyst for the share price underperformance in the last 2 weeks, especially after the Russian invasion of Ukraine which drove it up to a 100% increase.</li>
<li>Its main product is a lithium-ion secondary battery separator that is critical for rechargeable battery safety. Thus the sell-off due to the higher commodity price especially nickel is unwarranted.</li>
<li>
<a href="https://www.smartkarma.com/entities/w-scope-corp" target="_blank" data-smartkarma-citation="entities:8597:1" rel="noopener">W Scope Corp (6619 JP)</a> share price has underperformed the NCM and LFP battery makers presents a compelling buying opportunity. </li>
</ul>


Nickel price was the catalyst for the share price underperformance in the last 2 weeks, especially after the Russian invasion of Ukraine which drove it up to a 100% increase.
Its main product is a lithium-ion secondary battery separator that is critical for rechargeable battery safety. Thus the sell-off due to the higher commodity price especially nickel is unwarranted.

W Scope Corp (6619 JP) share price has underperformed the NCM and LFP battery makers presents a compelling buying opportunity. 


W Scope (6619): Wrong Victim of Nickel Price Surge

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>On 11 March, Korea Financial Investment Association (KFIA) announced that it will tighten IPO requirements for institutional investors.</li>
<li>This is likely to further dampen the local IPO market in Korea which has been in the doldrums after the biggest-ever IPO in Korea LG Energy Solution two month ago.</li>
<li>As a result of the change in the IPO requirements for institutional investors, this is likely to to negatively impact smaller investment funds without adequate amount of AUM.</li>
</ul>


On 11 March, Korea Financial Investment Association (KFIA) announced that it will tighten IPO requirements for institutional investors.
This is likely to further dampen the local IPO market in Korea which has been in the doldrums after the biggest-ever IPO in Korea LG Energy Solution two month ago.
As a result of the change in the IPO requirements for institutional investors, this is likely to to negatively impact smaller investment funds without adequate amount of AUM.


Korean Financial Authorities Tighten IPO Requirements for Institutional Investors

<ul>
<li>KODEX battery ETF does rebalancing four times a year from this March. The rebalancing trading is done for 3-trading days from March 14 to 16, presumably equal daily weight.</li>
<li>Due to the low float rate, LG Energy will fall to third place. Samsung SDI should become the top constituent with a 20% cap, followed by SK Innovation at 15%.</li>
<li>The passive impact sizes of the top four stocks are significant, considering they are in the same sector. So, they should make themselves a suitable target for long/short basket trading.</li>
</ul>


KODEX battery ETF does rebalancing four times a year from this March. The rebalancing trading is done for 3-trading days from March 14 to 16, presumably equal daily weight.
Due to the low float rate, LG Energy will fall to third place. Samsung SDI should become the top constituent with a 20% cap, followed by SK Innovation at 15%.
The passive impact sizes of the top four stocks are significant, considering they are in the same sector. So, they should make themselves a suitable target for long/short basket trading.


KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days

<ul>
<li>I sorted out those on KOSPI 200 with a weekly short-selling volume exceeding 10% of last week's total trade volume and a 30-day ADTV of +₩5B.</li>
<li>I further screened those having an increase in the weekly loan balance. As a result, I filtered 23 KOSPI 200 constituents meeting these conditions.</li>
<li>Among the filtered ones, those whose stock price did not drop last week are screened, meaning that the market's expectations for further share price declines are high for these names.</li>
</ul>


I sorted out those on KOSPI 200 with a weekly short-selling volume exceeding 10% of last week's total trade volume and a 30-day ADTV of +₩5B.
I further screened those having an increase in the weekly loan balance. As a result, I filtered 23 KOSPI 200 constituents meeting these conditions.
Among the filtered ones, those whose stock price did not drop last week are screened, meaning that the market's expectations for further share price declines are high for these names.


Short Interest Flow Checkup on KOSPI 200 Constituents

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

WISE Secondary Cell (TIGER ETF) Rebalancing Preview

This post previews the upcoming rebalancing of the WISE Secondary Cell Theme Index (TIGER ETF), whose effective date is April 15.

Sanghyun Park

W Scope (6619): Wrong Victim of Nickel Price Surge

W Scope's main product, secondary battery separator, is for LFP battery and not for NCM battery thus the surge in nickel price should have less...

Henry Soediarko

Korean Financial Authorities Tighten IPO Requirements for Institutional Investors

On 11 March, Korea Financial Investment Association (KFIA) announced that it will tighten IPO requirements for institutional investors. This is...

Douglas Kim

KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days

This post tracks and estimates the passive flows of the KODEX (FnGuide) Battery ETF rebalancing for the remaining two days until this Tuesday.

Sanghyun Park

Short Interest Flow Checkup on KOSPI 200 Constituents

This post checks up the short interests of the KOSPI 200 constituents available for short selling and screens out those with a high potential for a...

Sanghyun Park

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