In today’s briefing:
- A Plausible Explanation for Korea NPS’s Unusually Large Outflow on Local Stocks in May
- KOSPI Size Indices: Potential Migrations in September Are Moving
A Plausible Explanation for Korea NPS’s Unusually Large Outflow on Local Stocks in May
- NPS’s May net selling of ₩700B likely stems from retrieving outsourced management funds to allocate to the newly selected three value-up outsider managers.
- These value-up managers will start investing in Q3. NPS’s May net selling matches their allocations. We should design a setup targeting the likely inflow into value-up targets starting early July.
- In particular, we should watch non-financial value-up stocks like Kia Corp and Hyundai Motor, which had more significant May price impacts likely due to NPS outflow.
KOSPI Size Indices: Potential Migrations in September Are Moving
- The review period for the September rebalance of the KOSPI Size Indices will run from 1 June to 31 August.
- We see 6 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 6 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
- Stocks migrating upward have outperformed stocks migrating lower. But there are still stocks trading at a Price to Book of less than 1.
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