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

The closing date for the stock market this year is December 30 (Thursday). So, the ex-dividend date for the fourth quarter and fiscal year-end (for the December settlement companies) is December 29 (Wednesday).Among local stocks that have consistently paid dividends over the past three years, stocks with a dividend yield of 4% or higher at this point based on the FnGuide consensus DPS are as follows. Breaking down by industry, there are many financial and steel/chemical stocks in the list, which, of course, isn't surprising at all.<div class="content-highlight">The stocks highlighted in yellow in the list below (POSCO and Shinhan Financial) are stocks that pay quarterly dividends. And the stocks highlighted in red (Hana Financial and KB Financial) pay interim dividends.</div><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/240/690/original/Screen+Shot+2021-11-09+at+9.27.33+AM.png?1636468072" class="editor-image img-responsive" data-smartkarma-image-id="240690"></figure></section></section>

The closing date for the stock market this year is December 30 (Thursday). So, the ex-dividend date for the fourth quarter and fiscal year-end (for the December settlement companies) is December 29 (Wednesday).Among local stocks that have consistently paid dividends over the past three years, stocks with a dividend yield of 4% or higher at this point based on the FnGuide consensus DPS are as follows. Breaking down by industry, there are many financial and steel/chemical stocks in the list, which, of course, isn't surprising at all.The stocks highlighted in yellow in the list below (POSCO and Shinhan Financial) are stocks that pay quarterly dividends. And the stocks highlighted in red (Hana Financial and KB Financial) pay interim dividends.

Korea Dividend Stocks: +4% Yearend Yield & +50% YoY Growth with +₩10B ADTV

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Market dynamics remain healthy which suggests a new broad-based bull market is not far off. With that said, we are still waiting for confirmation in the form of breakouts or bullish price inflections on the broad global indexes (ACWI-US, ACWX-US, EFA-US, and EEM-US) in order to turn bullish.<ul type="disc">
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Actionable Theme: Major Autos/Auto Parts. Global automobile stocks display bullish price and RS inflections with many breaking out to new highs -- add exposure... see pages 3 and 5-6.</li>
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Actionable Theme: Financials. There continues to be a plethora of attractive Financial stocks globally, ranging from banks and insurance to financial services -- add exposure... see pages 4 and 6-14.</li>
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Market dynamics remain healthy which suggests a new broad-based bull market is not far off. With that said, we are still waiting for confirmation in the form of breakouts or bullish price inflections on the broad global indexes (ACWI-US, ACWX-US, EFA-US, and EEM-US) in order to turn bullish.

Actionable Theme: Major Autos/Auto Parts. Global automobile stocks display bullish price and RS inflections with many breaking out to new highs -- add exposure... see pages 3 and 5-6.

Actionable Theme: Financials. There continues to be a plethora of attractive Financial stocks globally, ranging from banks and insurance to financial services -- add exposure... see pages 4 and 6-14.


Buying Global Financials & Autos/Auto Parts

Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.

Our biggest concerns have stemmed from a handful of large-cap China internet names, which have held back the MSCI EM and Hang Seng indexes. We are also getting a breakout above $93.50-93.75 on the US dollar, a concerning risk-off signal. Still, our list of concerns remains short, and our outlook remains neutral yet constructive overall.

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140 KS)</a> announced that it plans a full privatization of the company by the end of 2021. Currently, Woori Financial's largest shareholder is Korea Deposit Insurance Corporation (KDIC) which has a 15.1% in the company. Korean government backed KDIC plans to sell at least 10% stake in <a href="https://m.stock.naver.com/index.html#/news/ranknews/view/018/0005034309" target="_blank" rel="noopener">Woori Financial</a> by the end of 2021.<div class="content-highlight">
One of the positives of Woori Financial after the privatization is completed is that the new controlling shareholder may try to improve various corporate governance policies in order to boost the total shareholder returns including paying higher dividends and completing higher share buyback with cancellations. 
With the announcement of the privatization of Woori Financial Holdings by the end of 2021, an attractive long-short trading idea in the Korean financial sector would be to go long <a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140 KS)</a> and go short <a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">KakaoBank (323410 KS)</a>.
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Woori Financial Group (316140 KS) announced that it plans a full privatization of the company by the end of 2021. Currently, Woori Financial's largest shareholder is Korea Deposit Insurance Corporation (KDIC) which has a 15.1% in the company. Korean government backed KDIC plans to sell at least 10% stake in Woori Financial by the end of 2021.
One of the positives of Woori Financial after the privatization is completed is that the new controlling shareholder may try to improve various corporate governance policies in order to boost the total shareholder returns including paying higher dividends and completing higher share buyback with cancellations. 
With the announcement of the privatization of Woori Financial Holdings by the end of 2021, an attractive long-short trading idea in the Korean financial sector would be to go long Woori Financial Group (316140 KS) and go short KakaoBank (323410 KS).


Privatization of Woori Financial by the End of 2021

Equity Bottom-Up

In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea. The six major banks have had solid share price performances this year as their share prices are up on average 23.5% YTD, outperforming the market. The overall trend among these different Korean banks' share prices (in terms of the % daily difference in the gaps of their share prices) has been consolidating.  Our data sample covers 246 trading days in the past year. An example of the pair trade idea is between <a href="https://www.smartkarma.com/entities/kb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:718:1" rel="noopener">KB Financial (105560 KS)</a> and <a href="https://www.smartkarma.com/entities/shinhan-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:6978:1" rel="noopener">Shinhan Financial (055550 KS). </a>In the past year, there were four trading days when the daily change in the difference between two stocks exceeded 15% and three trading days when the daily change in the difference between two stocks exceeded -10%. In the past several weeks, the gap in the difference between two stocks has been consolidating and there does not appear to be noticeable mean reversion trading opportunity on this pair trade right now.Trading idea: Look to put a mean reversion pair trade (long-short) if and when the daily change in the difference between the two stocks exceed either 15% or -10%.

In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea. The six major banks have had solid share price performances this year as their share prices are up on average 23.5% YTD, outperforming the market. The overall trend among these different Korean banks' share prices (in terms of the % daily difference in the gaps of their share prices) has been consolidating.  Our data sample covers 246 trading days in the past year. An example of the pair trade idea is between KB Financial (105560 KS) and Shinhan Financial (055550 KS). In the past year, there were four trading days when the daily change in the difference between two stocks exceeded 15% and three trading days when the daily change in the difference between two stocks exceeded -10%. In the past several weeks, the gap in the difference between two stocks has been consolidating and there does not appear to be noticeable mean reversion trading opportunity on this pair trade right now.Trading idea: Look to put a mean reversion pair trade (long-short) if and when the daily change in the difference between the two stocks exceed either 15% or -10%. 

Mean Reversion Pair Trade Ideas in the Korean Banking Sector

South Korea

Woori Financial Group Inc. provides commercial banking services. The Company offers deposit services, loan services, bill services, settlement services, credit card, international, online banking, and other related services. Woori Financial Group also operates banking and retail banking businesses.

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Woori Financial Group (316140 KS)

Korea Dividend Stocks: +4% Yearend Yield & +50% YoY Growth with +₩10B ADTV

This post searches and filters Korea's high dividend stocks meeting the conditions of a +4% yield and a +50% YoY growth with an ADTV of ₩10B based...

Sanghyun Park

Buying Global Financials & Autos/Auto Parts

Global automobile stocks display bullish price and RS inflections with many breaking out to new highs. Financials are attractive globally, ranging...

Vermilion Research

Global Cyclical Value Sectors Improving -- Buying Financials and Energy Names: ING Groep, Many More

Continued rising rates is likely to support value Sectors moving forward (especially Financials and Energy), and it also typically indicates...

Vermilion Research

Privatization of Woori Financial by the End of 2021

Woori Financial Group announced it plans a full privatization of the company by the end of 2021. An attractive long-short trading idea would be to...

Douglas Kim

Mean Reversion Pair Trade Ideas in the Korean Banking Sector

In this insight, we discuss 10 different mean reversion pair trade ideas among the 6 major banks in Korea.Our data sample covers 246 trading days...

Douglas Kim

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