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

<ul>
<li>Although not many, there are strong candidates for a safe play aimed at constituent change. Inclusion: <strong>Lotte Confectionery</strong> &amp; Exclusion: <strong>Samyang Holdings</strong>
</li>
<li>Lotte Confectionery's average daily market cap must fall by more than 30% to be pushed out of the borderline. Samyang Holdings's market cap gap to the second-lowest one is 17%.</li>
<li>The trading volume of these two is so small that a significant passive impact (relative to DTV) will likely occur. We should consider a little more aggressive approach, timing-wise.</li>
</ul>


Although not many, there are strong candidates for a safe play aimed at constituent change. Inclusion: Lotte Confectionery &amp; Exclusion: Samyang Holdings

Lotte Confectionery's average daily market cap must fall by more than 30% to be pushed out of the borderline. Samyang Holdings's market cap gap to the second-lowest one is 17%.
The trading volume of these two is so small that a significant passive impact (relative to DTV) will likely occur. We should consider a little more aggressive approach, timing-wise.


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>China has started to suspend nearly 2,000 food products from Taiwan to China as it protests a visit to Taipei by the US Speaker of the House Nancy Pelosi.</li>
<li>While this move will negatively impact the food producers in Taiwan, this will positively impact some of the major F&amp;B companies in Korea that sell their products in China.</li>
<li>Korean F&amp;B companies such as Crown Confectionery and Lotte Confectionery will likely to benefit from this ban as it results in reduced competition from major Taiwanese food companies in China. </li>
</ul>


China has started to suspend nearly 2,000 food products from Taiwan to China as it protests a visit to Taipei by the US Speaker of the House Nancy Pelosi.
While this move will negatively impact the food producers in Taiwan, this will positively impact some of the major F&amp;B companies in Korea that sell their products in China.
Korean F&amp;B companies such as Crown Confectionery and Lotte Confectionery will likely to benefit from this ban as it results in reduced competition from major Taiwanese food companies in China. 


Suspension of 2,000 Taiwan Food Products by China: Start of an Economic Warfare?

<ul>
<li>Lotte Confectionery's screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.</li>
<li>To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.</li>
<li>Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.</li>
</ul>


Lotte Confectionery's screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.
To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.
Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.


Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion

Hyundai Home Shopping Network / Event-Driven

<ul>
<li>This post explains how the rebalancing of the KOSPI 200 and KOSDAQ 150 is calculated. So, please note that this post does not have any investment recommendations.</li>
<li>Both indices have the same calculation method. However, the thresholds are different. They screen stocks using the three metrics: Market Cap, ADTV, and Market Cap Ranking (buffer).</li>
<li>The concept itself of these three metrics is not difficult. However, ranking it cumulatively often confuses us.</li>
</ul>


This post explains how the rebalancing of the KOSPI 200 and KOSDAQ 150 is calculated. So, please note that this post does not have any investment recommendations.
Both indices have the same calculation method. However, the thresholds are different. They screen stocks using the three metrics: Market Cap, ADTV, and Market Cap Ranking (buffer).
The concept itself of these three metrics is not difficult. However, ranking it cumulatively often confuses us.


A Thorough Guide to KOSPI 200 & KOSDAQ 150 Rebalancing Calculations

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>A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.</li>
<li>Currently, Miwon Specialty Chemical Co (268280 KS) is an add while <a href="https://www.smartkarma.com/entities/hyundai-home-shopping-network-corp" target="_blank" data-smartkarma-citation="entities:2357:1" rel="noopener">Hyundai Home Shopping Network (057050 KS)</a> is a delete.</li>
<li>
<a href="https://www.smartkarma.com/entities/samyang-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:9100:1" rel="noopener">Samyang Foods (003230 KS)</a>, <a href="https://www.smartkarma.com/entities/lotte-confectionery-co-ltd-1feb0155-08b6-44eb-bdbd-8d67cf757dac" target="_blank" data-smartkarma-citation="entities:25993:1" rel="noopener">Lotte Confectionery (280360 KS)</a>, <a href="https://www.smartkarma.com/entities/unid-co-ltd" target="_blank" data-smartkarma-citation="entities:11197:1" rel="noopener">Unid Co Ltd (014830 KS)</a> and <a href="https://www.smartkarma.com/entities/miwon-commercial-co-ltd" target="_blank" data-smartkarma-citation="entities:13416:1" rel="noopener">Miwon Commercial (002840 KS)</a> are close adds currently.</li>
</ul>


A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.
Currently, Miwon Specialty Chemical Co (268280 KS) is an add while Hyundai Home Shopping Network (057050 KS) is a delete.

Samyang Foods (003230 KS), Lotte Confectionery (280360 KS), Unid Co Ltd (014830 KS) and Miwon Commercial (002840 KS) are close adds currently.


KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

South Korea

Lotte Confectionery Co., Ltd. operates as a snack food manufacturing company. The Company produces and sells chewing gum, candy, biscuits, chocolates, pies, snacks, and other products. Lotte Confectionery markets its products worldwide.

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Lotte Confectionery (280360 KS)

KOSPI 200 December Rebalancing Safe Play

This post examines the KOSPI 200 rebalancing situation in December and discusses the names suitable for a safe play at this point.

Sanghyun Park

Suspension of 2,000 Taiwan Food Products by China: Start of an Economic Warfare?

China has started to suspend nearly 2,000 food products from Taiwan to China as it protests a visit to Taipei by the US Speaker of the House Nancy...

Douglas Kim

Merged Lotte Confectionery: Nearly Guaranteed Early Bird for KOSPI 200 Inclusion

This post investigates the merged Lotte Confectionery's inclusion possibility and resulting flow trend in the KOSPI 200 at the upcoming rebalancing...

Sanghyun Park

A Thorough Guide to KOSPI 200 & KOSDAQ 150 Rebalancing Calculations

This post explains how the rebalancing of the KOSPI 200 and KOSDAQ 150 is calculated. So, please note that this post does not have any investment...

Sanghyun Park

KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

We currently see one potential change to the KOSPI200 in Dec, though there are 4 more changes possible. There will be a lot to trade on some stocks...

Brian Freitas

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