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.

Equity Capital Markets

EcoPro Materials / Equity Capital Markets

<ul>
<li>The indicative price band is ₩36,200 to ₩46,000. Accordingly, the market capitalization implied by the price band is ₩2.68T to ₩3.40T.</li>
<li>The concern arises as to whether Ecopro Materials can consistently deliver a level of profitability that justifies receiving an equivalent valuation multiple to that of Ecopro BM.</li>
<li>The timing of this IPO coincides with the ongoing valuation correction in the local battery sector, making the valuation issue the most critical point to watch in this IPO.</li>
</ul>


The indicative price band is ₩36,200 to ₩46,000. Accordingly, the market capitalization implied by the price band is ₩2.68T to ₩3.40T.
The concern arises as to whether Ecopro Materials can consistently deliver a level of profitability that justifies receiving an equivalent valuation multiple to that of Ecopro BM.
The timing of this IPO coincides with the ongoing valuation correction in the local battery sector, making the valuation issue the most critical point to watch in this IPO.


Ecopro Materials IPO Prospectus Filed Today: Anticipating Inevitable Valuation Controversy

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

SK Biopharmaceuticals   / Index Rebalance

<ul>
<li>The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.</li>
<li>There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.</li>
<li>There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.</li>
</ul>


The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.
There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.


KRX New Deal Index Rebalance Preview: Review Period Nearly Complete

Event-Driven

<ul>
<li>KB Asset Management has announced the release of an inverse ETF, containing the top 10 core stocks in the secondary battery sector.</li>
<li>Given the substantial fluctuations in SSF trading volume in Korea, the flow increase of this ETF might temporarily lead to an unusually high level of backwardation.</li>
<li>Also, we may observe a phenomenon known as 'wag-the-dog' as the flow of this inverse ETF could act as a triggering factor for a temporary spark.</li>
</ul>


KB Asset Management has announced the release of an inverse ETF, containing the top 10 core stocks in the secondary battery sector.
Given the substantial fluctuations in SSF trading volume in Korea, the flow increase of this ETF might temporarily lead to an unusually high level of backwardation.
Also, we may observe a phenomenon known as 'wag-the-dog' as the flow of this inverse ETF could act as a triggering factor for a temporary spark.


Korea's First Sector Inverse ETF: Discussing Flow Trading Impacts

<ul>
<li>The changes to the LQ45/IDX30 were announced last week and will be implemented Monday. The PSE also announced that there would be no changes for the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">PCOMP INDEX</a> in August.</li>
<li>There are a bunch of review cutoffs on Monday, most notably for the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50 INDEX</a>, the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY</a> family of indices and the KRX New Deal indices.</li>
<li>There were inflows to China focused ETFs and outflows from Taiwan and Korea focused ETFs during the week.</li>
</ul>


The changes to the LQ45/IDX30 were announced last week and will be implemented Monday. The PSE also announced that there would be no changes for the PCOMP INDEX in August.
There are a bunch of review cutoffs on Monday, most notably for the Nikkei 225 (NKY INDEX), STAR50 INDEX, the NIFTY family of indices and the KRX New Deal indices.
There were inflows to China focused ETFs and outflows from Taiwan and Korea focused ETFs during the week.


Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>On 10 July, it was reported in the Hankyung Business Daily that Posco DX (022100 KS) could switch its listing from KOSDAQ to KOSPI by the end of 2023.</li>
<li>One of the key reasons for the change in the listing venue from KOSDAQ to KOSPI is that POSCO Group believes this could lead to improved valuations for the company.</li>
<li>We believe the valuations of Posco DX have become too high. Therefore, we have a Negative View of Posco DX at current prices. </li>
</ul>


On 10 July, it was reported in the Hankyung Business Daily that Posco DX (022100 KS) could switch its listing from KOSDAQ to KOSPI by the end of 2023.
One of the key reasons for the change in the listing venue from KOSDAQ to KOSPI is that POSCO Group believes this could lead to improved valuations for the company.
We believe the valuations of Posco DX have become too high. Therefore, we have a Negative View of Posco DX at current prices. 


POSCO DX Could Switch Its Listing from KOSDAQ to KOSPI by End of 2023

South Korea

Posco Future M Co., Ltd. manufactures and distributes energy materials. The Company produces battery materials, advanced chemical materials, basic industrial materials, and other related products. Posco Future M also produces lime chemical and refractory products.

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Posco Future M (003670 KS)

Ecopro Materials IPO Prospectus Filed Today: Anticipating Inevitable Valuation Controversy

This post details Ecopro Materials' IPO prospectus filed today and touches on an impending and unavoidable valuation controversy.

Sanghyun Park

KRX New Deal Index Rebalance Preview: Review Period Nearly Complete

The changes to the index were announced post market close on Friday and will be implemented at the close on Thursday. Given that the changes are...

Brian Freitas

Korea's First Sector Inverse ETF: Discussing Flow Trading Impacts

This post touches on the release of Korea's first sector inverse ETF containing the top 10 core secondary battery stocks and the resulting flow...

Sanghyun Park

Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

POSCO DX Could Switch Its Listing from KOSDAQ to KOSPI by End of 2023

After Hankyung Business Daily reported that Posco DX could switch its listing from KOSDAQ to KOSPI, Posco DX's share price jumped by 27.4% today....

Douglas Kim

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