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>Applying the T+3 relisting date as the effective date will again lead to noteworthy changes to the timeline of rebalancing flow trading.</li>
<li>It seems unnecessary to concentrate shorting on the trading halt day for Dongkuk Steel. We should aim for price corrections driven by passive flows on the T+2 period before effective.</li>
<li>Despite the Dongkuk Steel shareholders' approval on the 12th, Youlchon Chemical's price experienced a significant decline. The ongoing risk of major shareholder stake sales appears to have overshadowed this event.</li>
</ul>


Applying the T+3 relisting date as the effective date will again lead to noteworthy changes to the timeline of rebalancing flow trading.
It seems unnecessary to concentrate shorting on the trading halt day for Dongkuk Steel. We should aim for price corrections driven by passive flows on the T+2 period before effective.
Despite the Dongkuk Steel shareholders' approval on the 12th, Youlchon Chemical's price experienced a significant decline. The ongoing risk of major shareholder stake sales appears to have overshadowed this event.


KOSPI 200 Ad-Hoc Changes for Dongkuk Steel Spinoff: Discussing Flow Trading Timeline

<ul>
<li>Through the regular rebalancing, Kum Yang and Cosmo Chemical will be included in KOSPI 200, and Youlchon Chemical will be included as an ad-hoc change due to Dongkuk Steel's deletion.</li>
<li>We should prepare for an aggressive long position on Youlchon Chemical from a day trading perspective, targeting May 15th, the day after Dongkuk Steel's general meeting.</li>
<li>If the meeting is scheduled for the morning, we should consider entering the position in the afternoon of the 12th.</li>
</ul>


Through the regular rebalancing, Kum Yang and Cosmo Chemical will be included in KOSPI 200, and Youlchon Chemical will be included as an ad-hoc change due to Dongkuk Steel's deletion.
We should prepare for an aggressive long position on Youlchon Chemical from a day trading perspective, targeting May 15th, the day after Dongkuk Steel's general meeting.
If the meeting is scheduled for the morning, we should consider entering the position in the afternoon of the 12th.


Target May 15th for LONG Youlchon Chemical with Dongkuk Steel's Split Approval

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we discuss the potential new inclusions in KOSPI 200 rebalance in May 2023.</li>
<li>The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon Chemical. </li>
<li>Kumyang and Cosmo Chemical are up on average 177% YTD. We would not chase these two stocks as their share prices have already risen considerably. </li>
</ul>


In this insight, we discuss the potential new inclusions in KOSPI 200 rebalance in May 2023.
The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon Chemical. 
Kumyang and Cosmo Chemical are up on average 177% YTD. We would not chase these two stocks as their share prices have already risen considerably. 


Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023

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 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> will replace <a href="https://www.smartkarma.com/entities/hyundai-greenfood-co-ltd" target="_blank" data-smartkarma-citation="entities:19560:1" rel="noopener">Hyundai Greenfood (005440 KS)</a> in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> at the close on 12 April.</li>
<li>We expect <a href="https://www.smartkarma.com/entities/dgb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:6138:1" rel="noopener">DGB Financial Group (139130 KS)</a> will replace <a href="https://www.smartkarma.com/entities/meritz-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:19692:1" rel="noopener">Meritz Securities (008560 KS)</a> in early April.</li>
<li>Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.</li>
</ul>



Samyang Foods (003230 KS) will replace Hyundai Greenfood (005440 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 12 April.
We expect DGB Financial Group (139130 KS) will replace Meritz Securities (008560 KS) in early April.
Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.


KOSPI200 Index Rebalance Preview: Changes in April & June

<ul>
<li>On 20 February, KRX announced that effective 13 April 2023, Samyang Foods will be included in the KOSPI 200 index and Hyundai Greenfood will be excluded.</li>
<li>We have a positive view on Samyang Foods and we believe this stock will outperform KOSPI leading into the week of KOSPI 200 inclusion (13 April). </li>
<li>We think that expectation will play a bigger role and some investors may choose to buy this stock ahead of the actual inclusion date.</li>
</ul>


On 20 February, KRX announced that effective 13 April 2023, Samyang Foods will be included in the KOSPI 200 index and Hyundai Greenfood will be excluded.
We have a positive view on Samyang Foods and we believe this stock will outperform KOSPI leading into the week of KOSPI 200 inclusion (13 April). 
We think that expectation will play a bigger role and some investors may choose to buy this stock ahead of the actual inclusion date.


Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals

South Korea

Samyang Foods Co., Ltd. manufactures instant and processed food products, such as noodles, snacks, cooking oil, and feed.  The Company also produces dairy goods including milk, cheese, and ice cream.

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Samyang Foods (003230 KS)

KOSPI 200 Ad-Hoc Changes for Dongkuk Steel Spinoff: Discussing Flow Trading Timeline

This post details the KOSPI 200 corporate actions for Dongkuk Steel spinoff, which involves the addition of Youlchon Chemical, and discusses the...

Sanghyun Park

Target May 15th for LONG Youlchon Chemical with Dongkuk Steel's Split Approval

This post investigates the potential ad-hoc change in KOSPI 200 due to Dongkuk Steel's split and examines the Long position entry timing for the...

Sanghyun Park

Additional Potential Inclusions in KOSPI 200 Rebalance in May 2023

The five stocks that are potential inclusions in KOSPI 200 rebalance in May 2023 include Kumyang, Cosmo Chemical, Dentium, Jeju Air, and Youlchon...

Douglas Kim

KOSPI200 Index Rebalance Preview: Changes in April & June

There will be 2 changes to the index in April and then another 3 in June. Flows are significant on some stocks. The adds have all moved higher in...

Brian Freitas

Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals

We discuss Samyang Foods' inclusion in KOSPI 200 and the company's improving fundamentals. Driven by its highly popular spicy noodles, its sales...

Douglas Kim

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