In today’s briefing:
- My Take on June KS200, KQ150 & Value-Up Index Rebal
- KOSPI200 Index Rebalance: 8 Changes a Side with 2 Surprises
- KOSDAQ150 Index Rebalance: 9 Changes as Fadu Ignored Again
- KOSPI200 Jun25 Rebal: A Whopping 8 ADDs 8 DELETEs, At Least 1 Surprise – Some High ADV Changes
- HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale
- KOSPI 200 Tactical Outlook After Index Rebalancing
My Take on June KS200, KQ150 & Value-Up Index Rebal
- June rebal results are mostly in line, but Korea District Heating’s add and PI Advanced Materials’s drop surprised; Fadu missed KQ150 likely on KRX’s qual screen.
- As for Value-up Index, KRX avoided bold calls like cutting Samsung Electronics or Hanwha Aerospace, favoring stability over surprises—though this may further blur the Value-up Index’s purpose and spark criticism.
- June’s KRX rebalance flow looks muted amid macro noise and politics; expect punchier post-announcement trading but watch for momentum to fade about a week before June 13.
KOSPI200 Index Rebalance: 8 Changes a Side with 2 Surprises
- There will be 8 additions and 8 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 June.
- The inclusion of Korea District Heating (071320 KS) is a surprise and leads to an extra deletion – all the other adds are exactly in line with forecasts.
- The list of adds has been stable for the last few months and the stocks have outperformed the deletes and the KOSPI2 INDEX since the start of the review period.
KOSDAQ150 Index Rebalance: 9 Changes as Fadu Ignored Again
- There are 9 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) in June. Most of the adds and all of the deletes were forecast.
- The index committee have used their discretion and kept Fadu (440110 KS) and Snh Inc (051980 KS) out of the index for yet another rebalance – no reason provided.
- There’s been little movement in the relative performance of the adds/deletes the last few months. The announcement of the changes could see the stocks move over the next few weeks.
KOSPI200 Jun25 Rebal: A Whopping 8 ADDs 8 DELETEs, At Least 1 Surprise – Some High ADV Changes
- The June 2025 index review results for the KOSPI Indices were announced after the close on Tuesday 27th May 2024.
- There will be eight ADDs and eight DELs for KOSPI 200 during the June 2025 index rebal event. Some have high impact but round-trip flow is about US$175mm.
- We were expecting six ADDs and six DELs. All of those turned out to be correct but there were some surprises (more ADDs and DELs than we expected). Explained below.
HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale
- On 27 May, HYBE announced that it will sell its 9.4% in S.M.Entertainment (2.21 million shares) for about 243 billion won (US$145 million) to Tencent Music Entertainment.
- HYBE’s sale of its stake in SM Entertainment is expected to take place on Friday (30 May) after the market close through an after hours block deal trade.
- The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment’s shares mainly due to large share price discount (15.3%).
KOSPI 200 Tactical Outlook After Index Rebalancing
- Korea Exchange announced its KOSPI 200 rebalance changes on 27 May, Sanghyun Park and Douglas Kim wrote extensively about this, here we want to focus purely on the tactical strategy.
- The KOSPI 200 INDEX pulled back last week, then surged on Monday and stagnated on Tuesday, the index has plenty of room to go higher according to our model.
- According to our model, the number of rallies vastly offset the number of pullbacks when this pattern is encountered (=pullbacks are rare), this could be read as a bullish indication.
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