Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

Korea Stock Exchange KOSPI 200 / Equity Derivatives

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

<ul>
<li>A previously published <a href="https://www.smartkarma.com/insights/eqd-kospi-200-index-weekly-time-to-go-long" target="_blank" rel="noopener">insight</a> correctly highlighted an high-probability opportunity to go LONG and join the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a>'s current multi-month Bull run.</li>
<li>The index closed the week strongly up, now we want to evaluate how far this new leg up could go: a total of<strong> +3/+4 weeks up, price targets =359-385</strong>.</li>
<li>Holders of KOSPI 200 LONG positions: Covered Calls can be written at Strikes between 346 and 360, expiry August 10th (4 weeks). <strong>A pullback is highly probable from 360.</strong>
</li>
</ul>


A previously published insight correctly highlighted an high-probability opportunity to go LONG and join the KOSPI 200's current multi-month Bull run.
The index closed the week strongly up, now we want to evaluate how far this new leg up could go: a total of +3/+4 weeks up, price targets =359-385.
Holders of KOSPI 200 LONG positions: Covered Calls can be written at Strikes between 346 and 360, expiry August 10th (4 weeks). A pullback is highly probable from 360.



EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>SKC Co Ltd (011790 KS) announced on 29 April that it plans to change into an intermediate holding company.</li>
<li>We believe that the formation of an intermediate holding company structure could have a negative impact on SKC's share price. </li>
<li>This is because some investors may be concerned that SKC may try to complete IPOs of some of its valuable subsidiaries including SKCFT Holdings without adequate protection for SKC shareholders.</li>
</ul>


SKC Co Ltd (011790 KS) announced on 29 April that it plans to change into an intermediate holding company.
We believe that the formation of an intermediate holding company structure could have a negative impact on SKC's share price. 
This is because some investors may be concerned that SKC may try to complete IPOs of some of its valuable subsidiaries including SKCFT Holdings without adequate protection for SKC shareholders.


SKC Co: Formation of an Intermediate Holding Company

<ul>
<li>It has been reported that SK On received 1.2 trillion won investment from a consortium led by MBK Partners and SNB Capital, valuing SK On at about 25 trillion won.</li>
<li>Our SoTP valuation of SK Innovation suggests a target price of 274,738 won per share, which represents a 38% higher levels than current price.</li>
<li>SK Innovation's 96.5% stake in SK On (24.1 trillion won in value) is 130% higher than SK Innovation's current market cap.</li>
</ul>


It has been reported that SK On received 1.2 trillion won investment from a consortium led by MBK Partners and SNB Capital, valuing SK On at about 25 trillion won.
Our SoTP valuation of SK Innovation suggests a target price of 274,738 won per share, which represents a 38% higher levels than current price.
SK Innovation's 96.5% stake in SK On (24.1 trillion won in value) is 130% higher than SK Innovation's current market cap.


Higher Private Market Valuation of SK On: Positive Impact on SK Innovation

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.

<ul>
<li>We now have an environment that allows Korea's battery ETFs to include LG Chem in upcoming reviews. KODEX is in June, and TIGER is in July.</li>
<li>If LG Chem is included in each review, the expected one-day inflow is at 0.7-0.8x DTV, which can lead to a price impact similar to that of SKIET in 2021.</li>
<li>We should consider setups targeting this, including Long Short, which utilizes LG Energy Solution or LG Corp as a hedge.</li>
</ul>


We now have an environment that allows Korea's battery ETFs to include LG Chem in upcoming reviews. KODEX is in June, and TIGER is in July.
If LG Chem is included in each review, the expected one-day inflow is at 0.7-0.8x DTV, which can lead to a price impact similar to that of SKIET in 2021.
We should consider setups targeting this, including Long Short, which utilizes LG Energy Solution or LG Corp as a hedge.


Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs

<ul>
<li>WCP will likely be included in the rebalancing of Samsung KODEX Secondary Battery Industry ETF in June. And we should consider the possibility of this happening to be quite high.</li>
<li>We can expect a daily passive inflow of around 0.3x compared to WCP's typical DTV. The practical correlation with the price should be higher than the theoretical level.</li>
<li>We should consider using SKIET, which engages in the same business in the same sector, as a hedge. WCP/SKIET Long Short achieved considerable performance within the past week's window.</li>
</ul>


WCP will likely be included in the rebalancing of Samsung KODEX Secondary Battery Industry ETF in June. And we should consider the possibility of this happening to be quite high.
We can expect a daily passive inflow of around 0.3x compared to WCP's typical DTV. The practical correlation with the price should be higher than the theoretical level.
We should consider using SKIET, which engages in the same business in the same sector, as a hedge. WCP/SKIET Long Short achieved considerable performance within the past week's window.


A High Conviction Long Short Trade in KODEX Battery ETF Rebalancing in June

South Korea

SK IE Technology Co., Ltd operates as a material solution provider. The Company provides information material solutions, electronic materials solutions, and other products. SK IE Technology conducts businesses across worldwide.

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SK IE Technology (361610 KS)

EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?

Market Reversal Matrix (MRM)'s analysis of the KOSPI 200's WEEKLY current uptrend: price levels where the trend can stop and probability of...

Nico Rosti

SKC Co: Formation of an Intermediate Holding Company

This insight provides additional details of SKC which has announced highly aggressive investment plans to expand its rechargeable batteries and...

Douglas Kim

Higher Private Market Valuation of SK On: Positive Impact on SK Innovation

SK Innovation's 96.5% stake in SK On (24.1 trillion won in value) is 130% higher than SK Innovation's current market cap.

Douglas Kim

Flow Trading Opportunities on LG Chem with Potential Inclusion in Battery ETFs

This post looks at the flow trading opportunities on LG Chem, as it will likely be included in Korea's two battery ETFs in the upcoming reviews.

Sanghyun Park

A High Conviction Long Short Trade in KODEX Battery ETF Rebalancing in June

This post offers a high conviction Long Short trade idea after investigating WCP's inclusion in TIGER Battery ETF yesterday and the high...

Sanghyun Park

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