In today’s briefing:
- KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner
- Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades
- Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications
- Samsung Electronics (005930 KS) Tactical Outlook Amid Rumored Phase 2 Buyback Confirmation
- Korea Small Cap Gem #34: Makus
KOSDAQ150 Index Rebalance Preview: Announcement Around the Corner
- With the review period for the June rebalance complete, we highlight 11 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
- The estimated impact on the potential inclusions ranges from 0.2-7.5 days of ADV while the impact on the potential deletions varies from 0.2-5.8 days of ADV.
- The forecast adds have outperformed the forecast deletes over the last 6-7 months with a big move higher in the last month. Trim positions into strength.
Surge in ETF Trading Share on KOSPI: Spot Dislocation Opportunities from Leverage Trades
- ETF trading topped 50% of KOSPI turnover in April—a first outside the March 2020 COVID crash—rising nearly 14 percentage points month-to-month despite a sharp overall volume drop.
- Despite a 30% drop in KOSPI volume, leveraged and inverse ETFs surged 28% and 34%, led by ‘KODEX Leverage’ and ‘KODEX 200 Futures Inverse 2X’ hitting top ADV ranks.
- Some local traders see opportunities in spot market dislocations amid volatility, futures rollovers, and ETF-driven supply-demand imbalances likely to persist from last month’s surge.
Samsung Electronics’ Phase 2 Buyback Disposal Plan Virtually Finalized: Two Key Trading Implications
- If ₩500B comes from common shares, about 40M shares retire, raising Samsung Life and Fire stakes to 10.07%, requiring a ₩0.23T block sale to trim excess.
- Slightly smaller than last time but still notable, the insurers acted fast in February. Expect a ~0.07% block trade soon, though price impact was mild previously.
- Watch for preferred share outperformance as phase two buyback hits 0.66% common vs. 0.81% preferred (effective buyback assuming cancellation); similar dynamics may repeat in the larger ₩4T phase three buyback.
Samsung Electronics (005930 KS) Tactical Outlook Amid Rumored Phase 2 Buyback Confirmation
- As reported by Sanghyun Park, Samsung Electronics (005930 KS) ‘s phase 2 buyback disposal plan appears to be virtually finalized (or will be finalized soon – not official yet).
- As always, we’ll assess what our tactical models suggest about the trend from here—interpreted alongside the latest catalysts.
- We have been monitoring Samsung Electronics (005930 KS) for a while: the stock has been bottoming, then flat for a while, rallied modestly, now a minor pullback… time to BUY?
Korea Small Cap Gem #34: Makus
- Makus is #34 in our Korea Small Cap Gem series. Its treasury shares as percentage of outstanding shares is 44%. Net cash as a percent of market cap is 78%.
- With greater interest in companies that have a combination of high levels of treasury shares as a percentage of market cap, cheap valuations, and excellent fundamentals, Makus fits the bill.
- Makus could be one of the targets for potential tender offers/M&As and likely to outperform the market in the next 1-2 years.
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