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

Meritz Fire & Marine Insurance / Event-Driven

Meritz Fire & Marine Insurance (000060 KS)

<ul>
<li>There is a clear correlation between the resumption of short selling and the overvaluation of stock prices, which was actively reflected when short selling resumed.</li>
<li>So, in this rebalancing as well, we need to target those who have seen a significant share price rise recently while looking at the increasing trend of the loan balance.</li>
<li>The stocks to watch are Meritz Fire and Hana Tour as their recent share price has been the most solid. In particular, Hana Tour is conducting a capital increase.</li>
</ul>


There is a clear correlation between the resumption of short selling and the overvaluation of stock prices, which was actively reflected when short selling resumed.
So, in this rebalancing as well, we need to target those who have seen a significant share price rise recently while looking at the increasing trend of the loan balance.
The stocks to watch are Meritz Fire and Hana Tour as their recent share price has been the most solid. In particular, Hana Tour is conducting a capital increase.


KOSPI 200 Rebalancing: Shorting Event for Additions

<ul>
<li>I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.</li>
<li>I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.</li>
<li>As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries
</li>
</ul>


I screened those local buybacks in Korea with a market cap of +₩300B. I further selected those whose buyback volume exceeds 0.5% of SO and buyback completion is below 50%.
I then narrowed them down to those whose buybacks will likely be completed within 30 trading days with a daily buyback x ADTV of 0.15x or higher.
As a result, I obtained nine names: Hwasung Industrial, SK Chemicals, Meritz Securities, Huons Global, Daishin Securities, E-Mart, Meritz Financial Group, Meritz Fire, &amp; Hwaseung Industries



KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>On 17 January 2022, we recommended going long on Korea Investment Holdings and going short on Meritz Financial Group. </li>
<li>We would close out this pair trade as it has returned 12% (net gains), as of 3 February. </li>
<li>We now see a better pair trade of going long Korea Investment Holdings &amp; short Meritz Securities. </li>
</ul>


On 17 January 2022, we recommended going long on Korea Investment Holdings and going short on Meritz Financial Group. 
We would close out this pair trade as it has returned 12% (net gains), as of 3 February. 
We now see a better pair trade of going long Korea Investment Holdings &amp; short Meritz Securities. 


Close Out the Pair Trade of KIH & MFG and Initiate a New Pair Trade Between KIH & Meritz Securities

<ul>
<li>KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.</li>
<li>So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.</li>
<li>Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.</li>
</ul>


KRX calculates floats fairly aggressively even in new IPOs. This was symbolically shown in the case of Kakao Pay, which received a 35% float rate.
So, we need a trading setup that raises the float rate prediction range in future KOSPI 200 Fast Entry cases.
Considering that rebalancing trading that occurs on the implementation day is now partially digested in regular trading hours, we need to consider getting out positions before the closing auction hours.


KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

<ul>
<li>The effective date for rebalancing KOSPI 200 and KOSDAQ 150 is this Friday. This is the first trading day that short selling is permitted on new stocks in these indexes.</li>
<li>From the 25th to today, immediately after the inclusion of these indexes was announced, the loan share balance of almost all stocks increased significantly.</li>
<li>Those stocks with substantial outperformance in price and relatively abundant liquidity have a high level of loan balance.</li>
</ul>


The effective date for rebalancing KOSPI 200 and KOSDAQ 150 is this Friday. This is the first trading day that short selling is permitted on new stocks in these indexes.
From the 25th to today, immediately after the inclusion of these indexes was announced, the loan share balance of almost all stocks increased significantly.
Those stocks with substantial outperformance in price and relatively abundant liquidity have a high level of loan balance.


Short Position Approach on the Index Entrants on December 10 in Korea

South Korea

Meritz Financial Group Inc is a holding company of Meritz Securities, Meritz Asset Management, Meritz Financial Information Service and et cetera. The Company manages and controls its financial subsidiaries.

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Meritz Financial Group (138040 KS)

KOSPI 200 Rebalancing: Shorting Event for Additions

This post investigates potential shorting opportunities on the new additions at KOSPI 200's upcoming rebalancing in June.

Sanghyun Park

KOSPI/KOSDAQ Buybacks in Progress: Those with High Daily Flow Screened

This post details share buybacks in progress among the KOSPI/KOSDAQ stocks and screens those with a high daily flow (+0.15x ADTV).

Sanghyun Park

Close Out the Pair Trade of KIH & MFG and Initiate a New Pair Trade Between KIH & Meritz Securities

On 17 January 2022, we recommended going long on Korea Investment Holdings and going short on Meritz Financial Group. We would close out this pair...

Douglas Kim

KOSPI 200 New Entrants: KRX-Concluded Float Rates & Rebalancing Trading Pattern Today

Kakao Pay eventually received a 35% float rate, meaning that KRX has included all of Alipay's non-locked stake in the float.

Sanghyun Park

Short Position Approach on the Index Entrants on December 10 in Korea

The effective date for rebalancing KOSPI 200 and KOSDAQ 150 is this Friday, meaning that this is the first trading day that short selling is...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)