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>Given SunEel's market cap and the level of relevance to the rechargeable battery business, KODEX will likely include it this time around.</li>
<li>If you are looking for a short-selling opportunity, I recommend adjusting the timing after this KODEX ETF passive event.</li>
<li>If you are long targeting the KOSDAQ 150 inclusion, I recommend taking a slightly longer holding window to additionally target the passive inflow of the KODEX ETF.</li>
</ul>


Given SunEel's market cap and the level of relevance to the rechargeable battery business, KODEX will likely include it this time around.
If you are looking for a short-selling opportunity, I recommend adjusting the timing after this KODEX ETF passive event.
If you are long targeting the KOSDAQ 150 inclusion, I recommend taking a slightly longer holding window to additionally target the passive inflow of the KODEX ETF.


KODEX Battery ETF Rebalancing & SungEel Hitech Trading Situation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>An ideal timing of selling/shorting Sungeel Hitech would be after its stock is included in KOSDAQ 150 but before the end of the 6 months lock up period. </li>
<li>Sungeel Hitech is a likely candidate for an early entry in KOSDAQ 150 in December.</li>
<li>Sungeel Hitech's 6 months end of lock-up period is on 28 January 2023. There are 0.31 million shares (2.6% of total outstanding shares) that can be sold after this period.</li>
</ul>


An ideal timing of selling/shorting Sungeel Hitech would be after its stock is included in KOSDAQ 150 but before the end of the 6 months lock up period. 
Sungeel Hitech is a likely candidate for an early entry in KOSDAQ 150 in December.
Sungeel Hitech's 6 months end of lock-up period is on 28 January 2023. There are 0.31 million shares (2.6% of total outstanding shares) that can be sold after this period.


Sungeel Hitech: Timing Trading Angle (End of Lock Up Period & Early Inclusion of KOSDAQ 150)

Index Rebalance

<ul>
<li>Korea's partial short-selling system, implemented in May last year, created a new trading pattern, a surge in short selling for new additions, immediately after index rebalancing.</li>
<li>Canaria Bio, HPSP, and SungEel Hitech are highly likely to be the primary targets for short selling, but there is one more thing we need to consider.</li>
<li>KODEX will likely begin rebalancing buying on HPSP and SungEel on December 9, the same day the short-selling starts for them. So, we need a more flexible setup.</li>
</ul>


Korea's partial short-selling system, implemented in May last year, created a new trading pattern, a surge in short selling for new additions, immediately after index rebalancing.
Canaria Bio, HPSP, and SungEel Hitech are highly likely to be the primary targets for short selling, but there is one more thing we need to consider.
KODEX will likely begin rebalancing buying on HPSP and SungEel on December 9, the same day the short-selling starts for them. So, we need a more flexible setup.


Shorting Setup on Additions to KS200/KQ150 with KODEX Battery ETF Flow

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>With the review period complete, we see 11 potential changes to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> at the December rebalance.</li>
<li>Most of the potential changes are high probability ones, but there are some stocks that are very close to market cap and liquidity cutoffs.</li>
<li>The impact of passive trading will be much higher on the potential deletes as compared to the potential inclusions, though trade notionals are higher for the potential adds.</li>
</ul>


With the review period complete, we see 11 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
Most of the potential changes are high probability ones, but there are some stocks that are very close to market cap and liquidity cutoffs.
The impact of passive trading will be much higher on the potential deletes as compared to the potential inclusions, though trade notionals are higher for the potential adds.


KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks

<ul>
<li>The 2nd screening only deals with those who have passed the 1st screening. The 2nd screening does NOT include the first company to cross the threshold.</li>
<li>Lotte Confectionery will be the only addition to the KOSPI 200. Samyang Holdings or Hyundai Home Shopping Network will leave the index.</li>
<li>There will be ten changes in the KOSDAQ 150: eight regular &amp; two special entries. WCP's special entry still seems uncertain due to the GICS classification issue.</li>
</ul>


The 2nd screening only deals with those who have passed the 1st screening. The 2nd screening does NOT include the first company to cross the threshold.
Lotte Confectionery will be the only addition to the KOSPI 200. Samyang Holdings or Hyundai Home Shopping Network will leave the index.
There will be ten changes in the KOSDAQ 150: eight regular &amp; two special entries. WCP's special entry still seems uncertain due to the GICS classification issue.


KOSPI 200 & KOSDAQ 150: Rule Clarifications & Rebalancing Predictions

South Korea

Sungeel Hitech Co., Ltd. operates as a leading secondary battery recycling company. The Company provides lithium ion battery recycling, sustainable rechargeable battery recycling, waste batteries full circulatory recycling, and circulation services. Sungeel Hitech markets its products worldwide.

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Sungeel Hitech (365340 KS)

KODEX Battery ETF Rebalancing & SungEel Hitech Trading Situation

This post examines the KODEX Battery ETF rebalancing in December and how it relates to SungEel Hitech's flow trading and shorting situation.

Sanghyun Park

Sungeel Hitech: Timing Trading Angle (End of Lock Up Period & Early Inclusion of KOSDAQ 150)

An ideal timing of selling/shorting Sungeel Hitech would be after its stock is included in KOSDAQ 150 but before the end of the 6 months lock up...

Douglas Kim

Shorting Setup on Additions to KS200/KQ150 with KODEX Battery ETF Flow

This post examines the shorting situation of the KS200/KQ150 additions in the upcoming rebalancing with the potentially mitigating flow from the...

Sanghyun Park

KOSDAQ150 Index Rebalance Preview: Big Churn in IT, Healthcare Stocks

There could be 11 changes at the Dec rebalance. Most changes are high probability and will result in a big churn in the IT & Healthcare sectors....

Brian Freitas

KOSPI 200 & KOSDAQ 150: Rule Clarifications & Rebalancing Predictions

This post clarifies some vague rules of the KOSPI 200 & KOSDAQ 150 rebalancing and discusses the constituent changes in the December review.

Sanghyun Park

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