Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

Korea Stock Exchange Kospi Index / Event-Driven

The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The Index was developed with a base value of 100 as of January 4, 1980. Note: The preferred shares are excluded in calculating the KOSPI Index from June 14, 2002. 

Korea Stock Exchange Kospi Index (KOSPI INDEX)

<ul>
<li>Today, NPS made the final decision to introduce a reference portfolio. The critical point is the increase in risky assets from 56% to 65%, also decided at today's meeting.</li>
<li>Initially, overseas equity was prioritized, but recent forecasts suggest significant potential in increasing local equity, aligning with the value-up policy.</li>
<li>Monitoring NPS's execution plan, including allocation and timing by asset class, is vital to gauge inflow size, especially for Value-up beneficiaries.</li>
</ul>


Today, NPS made the final decision to introduce a reference portfolio. The critical point is the increase in risky assets from 56% to 65%, also decided at today's meeting.
Initially, overseas equity was prioritized, but recent forecasts suggest significant potential in increasing local equity, aligning with the value-up policy.
Monitoring NPS's execution plan, including allocation and timing by asset class, is vital to gauge inflow size, especially for Value-up beneficiaries.


NPS Confirms Reference Portfolio & Risky Assets Upweight: Implications for Value-Up Stocks

CJ CheilJedang Corp. manufactures processed food products.  The Company's products include refined sugar, monosodium glutamate (MSG), condiment, wheat powder, flour, cooking oil, processed meats, and animal feed.  CJ CheilJedang also manufactures pharmaceutical and household products.

<ul>
<li>Of utmost importance in these guidelines will be the framework for Value-up disclosure. Local authorities aim to encourage proactive disclosure, starting with companies that are well-prepared.</li>
<li>Two companies are being closely watched as potential candidates for the first Value-up disclosure: CJ Cheiljedang (097950 KS) and Koh Young Technology (098460 KS).</li>
<li>The rationale for us to actively engage in alpha trading with these two names stems from the strong probability that they will emerge as cornerstone constituents of the Value-up index</li>
</ul>


Of utmost importance in these guidelines will be the framework for Value-up disclosure. Local authorities aim to encourage proactive disclosure, starting with companies that are well-prepared.
Two companies are being closely watched as potential candidates for the first Value-up disclosure: CJ Cheiljedang (097950 KS) and Koh Young Technology (098460 KS).
The rationale for us to actively engage in alpha trading with these two names stems from the strong probability that they will emerge as cornerstone constituents of the Value-up index


Leading Candidates for the First Value-Up Disclosure

<ul>
<li>May 17th, all eyes on EcoPro Materials for a buzzed-about lockup release. BRV Capital holds 24.5% stake, 17M shares. Lockup ends May 16th; they're free to sell off without constraints.</li>
<li>Apparently, they're eager to cash out, with a profit margin around 30 times and 7 years invested. Many at Yeouido bet they'll sell out once the lockup's over.</li>
<li>We might start building a shorting position with futures targeting this lockup release from April 22nd. This could stir up some weird backwardation, which could give us another trading opportunity.</li>
</ul>


May 17th, all eyes on EcoPro Materials for a buzzed-about lockup release. BRV Capital holds 24.5% stake, 17M shares. Lockup ends May 16th; they're free to sell off without constraints.
Apparently, they're eager to cash out, with a profit margin around 30 times and 7 years invested. Many at Yeouido bet they'll sell out once the lockup's over.
We might start building a shorting position with futures targeting this lockup release from April 22nd. This could stir up some weird backwardation, which could give us another trading opportunity.


May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials

Connectwave Co., Ltd. operates as an online shopping portal site. The Company provides price comparing and shopping information providing service. Connectwave also generates income from advertisement.

<ul>
<li>MBK Partners will launch a tender offer for ConnectWave from today to May 24th. The target volume is 16.6M shares (40% of SO) at ₩18,000 per share, a 15.6% premium.</li>
<li>MBK commits to acquiring all tendered shares, regardless of subscription rates, in order to expedite the delisting process. So, there is no cancellation or allocation risk.</li>
<li>ConnectWave's retail investor base, with high entry prices, may hinder reaching 70% of the target volume. Absence of risks suggests considering buy positions for potential secondary tender offer.</li>
</ul>


MBK Partners will launch a tender offer for ConnectWave from today to May 24th. The target volume is 16.6M shares (40% of SO) at ₩18,000 per share, a 15.6% premium.
MBK commits to acquiring all tendered shares, regardless of subscription rates, in order to expedite the delisting process. So, there is no cancellation or allocation risk.
ConnectWave's retail investor base, with high entry prices, may hinder reaching 70% of the target volume. Absence of risks suggests considering buy positions for potential secondary tender offer.


MBK's ConnectWave Tender Offer: Details & Trading Angles

Korea Stock Exchange KOSPI 200 / Event-Driven

The KOSPI 200 Index is a capitalization-weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index was developed with a base value of 100 as of January 3, 1990.

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

<ul>
<li>Chosun reports Korean financial authorities advance Value-up plan guidelines to May 2nd, citing momentum decline post-election. Chosun's credibility enhances report validity.</li>
<li>Companies will commence Value-up-related disclosures in alignment with the guidelines within May. A dedicated Value-up website is set to launch in May.</li>
<li>The May 2nd guideline release date is crucial for Value-up momentum trading. Anticipate heightened volatility in Value-up stocks approaching this date.</li>
</ul>


Chosun reports Korean financial authorities advance Value-up plan guidelines to May 2nd, citing momentum decline post-election. Chosun's credibility enhances report validity.
Companies will commence Value-up-related disclosures in alignment with the guidelines within May. A dedicated Value-up website is set to launch in May.
The May 2nd guideline release date is crucial for Value-up momentum trading. Anticipate heightened volatility in Value-up stocks approaching this date.


Korea Value-Up Guidelines Release Date Is Set for May 2nd

I investigate special situations, pairs, and index rebalancing trades in Korea.

Sanghyun Park
Korea / Special Sits, Pairs, Index Rebalancing
• Clepsydra Capital

NPS Confirms Reference Portfolio & Risky Assets Upweight: Implications for Value-Up Stocks

This post outlines Korea NPS's decision to adopt the reference portfolio, raising risky assets allocation weight by 9%p to 65%, and its...

Sanghyun Park

Leading Candidates for the First Value-Up Disclosure

This post delves into the anticipated contents of the initial Value-up guidelines on May 2nd and identifies potential frontrunners for the...

Sanghyun Park

May Lockup Release & April SSF Listing May Lead to Weird Trading Dynamics for Ecopro Materials

Ecopro Materials' lockup release, scheduled for May 17, heralds a notable surge in its float rate. Projections indicate a leap from 17% to 51% at...

Sanghyun Park

MBK's ConnectWave Tender Offer: Details & Trading Angles

This post outlines MBK Partners' tender offer for ConnectWave shareholders at a 15% premium and explores potential trading angles.

Sanghyun Park

Korea Value-Up Guidelines Release Date Is Set for May 2nd

Practically confirmed for May 2nd, Korea's Value-up guidelines release date holds significant importance for traders anticipating momentum shifts.

Sanghyun Park