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>“Effective immediately” matters for L2 exit timing and re-flag risk; KRX confirmed year-end announcement with instant rollout, making year-end the key flow inflection if big L2 names get exempted.</li>
<li>Large caps (₩10tn+ market cap) pulled from market-warning universe, with L2 tagging now factoring relative outperformance, not just absolute price gains, to curb overuse.</li>
<li>Of 33 L2 names, five KOSPI blue chips see re-flag risk drop after their mandatory 10-day lockup; near-term trades focus on timing these expiries for relief rallies and flow resets.</li>
</ul>


“Effective immediately” matters for L2 exit timing and re-flag risk; KRX confirmed year-end announcement with instant rollout, making year-end the key flow inflection if big L2 names get exempted.
Large caps (₩10tn+ market cap) pulled from market-warning universe, with L2 tagging now factoring relative outperformance, not just absolute price gains, to curb overuse.
Of 33 L2 names, five KOSPI blue chips see re-flag risk drop after their mandatory 10-day lockup; near-term trades focus on timing these expiries for relief rallies and flow resets.


Fresh Intel Just in on KRX’s L2 Warning Revamp

<ul>
<li>SK Hynix and SK Square hit L2 flags; cash-only until Dec 24. Margin off, &gt;40% two-day rip triggers halt. L2 lifts if below T-5/+45%, T-15/+75%, and 15-day high.</li>
<li>L2’s usually a non-event, but this time the margin freeze probably smacks Hynix harder. Key trigger is staying below the 15-day high: Hynix ₩587,000, Square ₩324,000.</li>
<li>Govt set to roll out AI-semiconductor holdco deregulation this week, boosting AI holdcos like Square and juicing a near-term Square-over-Hynix trade opportunity.</li>
</ul>


SK Hynix and SK Square hit L2 flags; cash-only until Dec 24. Margin off, &gt;40% two-day rip triggers halt. L2 lifts if below T-5/+45%, T-15/+75%, and 15-day high.
L2’s usually a non-event, but this time the margin freeze probably smacks Hynix harder. Key trigger is staying below the 15-day high: Hynix ₩587,000, Square ₩324,000.
Govt set to roll out AI-semiconductor holdco deregulation this week, boosting AI holdcos like Square and juicing a near-term Square-over-Hynix trade opportunity.


Hynix & Square L2 Flags Set to Squeeze Spread Near Term

<ul>
<li>ADR odds are tiny. Both Samsung and Hynix have thin control stakes, making governance risk too high. Neither is willing to chase a valuation pop at the expense of stability.</li>
<li>Still can’t ignore it, since the ADR chatter is meaningfully swinging the pair trades. Samsung pref spread and Hynix/Square are both getting pushed around.</li>
<li>ADR noise cooled today, but it can easily resurface and skew the setup. Treat as noise, but be ready to hit aggressive reversion trades when it pops again.</li>
</ul>


ADR odds are tiny. Both Samsung and Hynix have thin control stakes, making governance risk too high. Neither is willing to chase a valuation pop at the expense of stability.
Still can’t ignore it, since the ADR chatter is meaningfully swinging the pair trades. Samsung pref spread and Hynix/Square are both getting pushed around.
ADR noise cooled today, but it can easily resurface and skew the setup. Treat as noise, but be ready to hit aggressive reversion trades when it pops again.


Read-Through on the Samsung/Hynix ADR-Listing Noise

<ul>
<li>If the three non-IT names exit IT, passive flows hit hard: SK Square/LG Electronics ~0.4× DTV out, LG Corp ~0.8× DTV out, new IT entrants ~0.2–0.25× DTV in.</li>
<li>If KRX surprises next Tuesday, kicking three names from IT, expect immediate tape reaction—market memory exists, but the scenario isn’t priced, unlike 2023 Kakaopay, so instant price impact is likely.</li>
<li>If this happens, June 11 turns into a chunky basket-flow day: SK Square (~15% weight) out, next-tier caps see ~0.15–0.2× DTV inflow, except ultra-liquid names like Hanmi Semi.</li>
</ul>


If the three non-IT names exit IT, passive flows hit hard: SK Square/LG Electronics ~0.4× DTV out, LG Corp ~0.8× DTV out, new IT entrants ~0.2–0.25× DTV in.
If KRX surprises next Tuesday, kicking three names from IT, expect immediate tape reaction—market memory exists, but the scenario isn’t priced, unlike 2023 Kakaopay, so instant price impact is likely.
If this happens, June 11 turns into a chunky basket-flow day: SK Square (~15% weight) out, next-tier caps see ~0.15–0.2× DTV inflow, except ultra-liquid names like Hanmi Semi.


Unexpected ETF-Driven Flow Event Lights up the KOSPI 200 IT Sleeve

<ul>
<li>Square closed ₩290,000, missing all criteria; Level 2 removal effectively confirmed, with KRX disclosure expected ~8 p.m. Seoul, effective from tomorrow’s open.</li>
<li>Square vs Hynix hinges on retail chase structurally, but near‑term Square’s underperformance worsened by asymmetric leverage shackles.</li>
<li>Square’s Level 2 setup ends tomorrow; flows normalize, likely giving Square more juice vs Hynix. Key spot to watch from tomorrow’s open.</li>
</ul>


Square closed ₩290,000, missing all criteria; Level 2 removal effectively confirmed, with KRX disclosure expected ~8 p.m. Seoul, effective from tomorrow’s open.
Square vs Hynix hinges on retail chase structurally, but near‑term Square’s underperformance worsened by asymmetric leverage shackles.
Square’s Level 2 setup ends tomorrow; flows normalize, likely giving Square more juice vs Hynix. Key spot to watch from tomorrow’s open.


Square’s Level 2 Leverage Caps End Tomorrow — Fresh Near‑term Factor in the Square Vs Hynix Setup

South Korea

SK Square Co., Ltd. operates as an investment company. The Company invests in semiconductors, information and communications technologies, and other industries. SK Square conducts businesses in South Korea.

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SK Square (402340 KS)

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