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

<ul>
<li>The annual rebalance of the Korea Value-Up Index will take place at the close of trading on 11 June. There are 20 adds and 19 deletes for the index.</li>
<li>There will be big capping flows for <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, leading to one-way turnover of 30% and a round-trip trade of US$1.4bn.</li>
<li>Industrials stocks gain 8 index spots while Information Technology and Consumer Discretionary stocks are net losers with 5 and 3 spots lost respectively.</li>
</ul>


The annual rebalance of the Korea Value-Up Index will take place at the close of trading on 11 June. There are 20 adds and 19 deletes for the index.
There will be big capping flows for Samsung Electronics (005930 KS) and SK Hynix (000660 KS), leading to one-way turnover of 30% and a round-trip trade of US$1.4bn.
Industrials stocks gain 8 index spots while Information Technology and Consumer Discretionary stocks are net losers with 5 and 3 spots lost respectively.


Korea Value-Up Index Rebalance: US$1.4bn Round-Trip Trade Tomorrow

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of KRX stocks as of Jan 2nd. The aggregated holding was USD907.1bn.</li>
<li>We estimate that foreign flows to be inflows of USD1,308mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in SK Hynix, Samsung Electronics, LG Energy Solution, Kakao, HYUNDAI ROTEM.</li>
</ul>


We analyzed the changes in foreign holdings of KRX stocks as of Jan 2nd. The aggregated holding was USD907.1bn.
We estimate that foreign flows to be inflows of USD1,308mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in SK Hynix, Samsung Electronics, LG Energy Solution, Kakao, HYUNDAI ROTEM.


KRX Foreign Holding Weekly (Jan 2nd): SK Hynix, Samsung Electronics, LG Energy Solution, Kakao

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.</li>
<li>The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.</li>
<li>We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).</li>
</ul>


The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.
The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.
We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).


Launch of Starlink Service by SpaceX - Impact on 11 Korean Companies

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>LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.</li>
<li>Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.</li>
<li>SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.</li>
</ul>


LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.
Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.


Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vitzrocell-co-ltd" target="_blank" data-smartkarma-citation="entities:4885:1" rel="noopener">Vitzrocell (082920 KS)</a> is the 15th company in our Korea Small Cap Gems series. </li>
<li>Vitzrocell is the domestic leader in lithium-based primary batteries. In the global market, it is considered as one of the top three players along with SAFT (France) and Tandiran (Israel). </li>
<li>On 3 February, it was reported that Scion Asset Management increased its stake in the company to 5.25% (as of 26 January 2022). </li>
</ul>



Vitzrocell (082920 KS) is the 15th company in our Korea Small Cap Gems series. 
Vitzrocell is the domestic leader in lithium-based primary batteries. In the global market, it is considered as one of the top three players along with SAFT (France) and Tandiran (Israel). 
On 3 February, it was reported that Scion Asset Management increased its stake in the company to 5.25% (as of 26 January 2022). 


South Korea

Vitzrocell Co., Ltd. manufactures and exports industrial and consumer speciality batteries, such as lithium and manganis batteris.

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Vitzrocell (082920 KS)

Korea Value-Up Index Rebalance: US$1.4bn Round-Trip Trade Tomorrow

There are 20 adds and 19 deletes for the index in June, plus large capping changes for Samsung Electronics and SK Hynix, leading to one-way...

Brian Freitas

KRX Foreign Holding Weekly (Jan 2nd): SK Hynix, Samsung Electronics, LG Energy Solution, Kakao

We analyzed KRX foreign holding data for the past week and highlighted foreign holding changes in SK Hynix, Samsung Electronics, LG Energy...

Ke Yan, CFA, FRM

Launch of Starlink Service by SpaceX - Impact on 11 Korean Companies

The launch of the SpaceX's Starlink service in Korea in 2Q/3Q 2023 is likely to have a positive impact on companies such as Hanwha Aerospace, Solu...

Douglas Kim

Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

Sanghyun Park

Korea Small Cap Gem #15: Vitzrocell Co

Vitzrocell is the domestic leader in lithium-based primary batteries. On 3 February, it was reported that Scion Asset Management increased its...

Douglas Kim

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