Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

Bukwang Pharmaceutical / Equity Capital Markets

<ul>
<li>On 28 March, Bukwang Pharmaceutical (003000 KS) announced a capital raise of 100 billion won. Its share price fell by 13.3% today. </li>
<li>The company plans to issue 30.2 million new shares (44% of outstanding shares). Expected rights offering price is 3,310 won (15.1% lower than current price). </li>
<li>We are negative on Bukwang Pharm mainly due to excessive shareholding dilution from this rights offering as well as lack of valuation merits. </li>
</ul>


On 28 March, Bukwang Pharmaceutical (003000 KS) announced a capital raise of 100 billion won. Its share price fell by 13.3% today. 
The company plans to issue 30.2 million new shares (44% of outstanding shares). Expected rights offering price is 3,310 won (15.1% lower than current price). 
We are negative on Bukwang Pharm mainly due to excessive shareholding dilution from this rights offering as well as lack of valuation merits. 


Bukwang Pharm Announces A Capital Raise of 100 Billion Won

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>
<a href="https://www.smartkarma.com/entities/kum-yang-co-ltd" target="_blank" data-smartkarma-citation="entities:10364:1" rel="noopener">Kum Yang (001570 KS)</a>'s designation as an Administrative Issue should result in the deletion of the stock from the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> later this week.</li>
<li>
<a href="https://www.smartkarma.com/entities/taekwang-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:6291:1" rel="noopener">Taekwang Industrial (003240 KS)</a> could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.</li>
<li>
<a href="https://www.smartkarma.com/entities/miwon-specialty-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:44173:1" rel="noopener">Miwon Specialty Chemical (268280 KS)</a> ranked higher than <a href="https://www.smartkarma.com/entities/taekwang-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:6291:1" rel="noopener">Taekwang Industrial (003240 KS)</a> at the December rebalance but appears to fail the liquidity screen.</li>
</ul>



Kum Yang (001570 KS)'s designation as an Administrative Issue should result in the deletion of the stock from the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) later this week.

Taekwang Industrial (003240 KS) could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.

Miwon Specialty Chemical (268280 KS) ranked higher than Taekwang Industrial (003240 KS) at the December rebalance but appears to fail the liquidity screen.


KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)'s Designation Opens Up an Index Spot

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>Last time, price action showed up a week early, suggesting market makers are getting ahead, likely due to learning effects.</li>
<li>This round's a letdown—no KOSDAQ names and fewer plays. Still, lower-volume KOSPI names showed solid price action correlation in the last reshuffle.</li>
<li>This round, focus on low-volume KOSPI names, enter 5 days before the listing, and exit just before it drops, using the learning curve from the last reshuffle.</li>
</ul>


Last time, price action showed up a week early, suggesting market makers are getting ahead, likely due to learning effects.
This round's a letdown—no KOSDAQ names and fewer plays. Still, lower-volume KOSPI names showed solid price action correlation in the last reshuffle.
This round, focus on low-volume KOSPI names, enter 5 days before the listing, and exit just before it drops, using the learning curve from the last reshuffle.


KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve

<ul>
<li>In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. </li>
<li>Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.</li>
<li>Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. </li>
</ul>


In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. 
Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.
Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December. 


A Review of Major Equity Indices in Korea in 2024

Hyosung Heavy Industries Corp / Index Rebalance

Hyosung Heavy Industries Corp (298040 KS)

<ul>
<li>There will be 4 additions and 5 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the next rebalance to be implemented at the close on 12 December.</li>
<li>The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.</li>
<li>The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.</li>
</ul>


There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.


KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

South Korea

OCI Company Ltd. produces and sells chemical products. The Company manufactures basic chemicals, petrochemicals, carbon materials, rechargeable battery materials, and other products. OCI markets its products worldwide.

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OCI Co (456040 KS)

Bukwang Pharm Announces A Capital Raise of 100 Billion Won

On 28 March, Bukwang Pharmaceutical announced a capital raise of 100 billion won. The company plans to issue 30.2 million new shares (44% of...

Douglas Kim

KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)'s Designation Opens Up an Index Spot

Kumyang has been designated as an Administrative Issue and should be deleted from the KOSPI200 later this week. That opens the door for Taekwang...

Brian Freitas

KRX H1 SSF Reshuffle: Play Setup from Last Round’s Learning Curve

This post dives into KRX's H1 SSF reshuffle this year, where we can explore a play setup that leverages the learning effects observed from the...

Sanghyun Park

A Review of Major Equity Indices in Korea in 2024

We review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index. KRX plans to make special changes to the Korea...

Douglas Kim

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

The KOSPI200 December rebalance will be implemented at the close today. Since announcement, the adds are up 4.3% on average while the deletes are...

Brian Freitas

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