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

<ul>
<li>Samsung SDI and LG Chem are expected to be newly included in the index, while Hana Financial and KT&amp;G Corporation are predicted to be excluded.</li>
<li>The correlation between the price movement and the flow direction on the rebalancing trading day of constituent changes from the past reviews was quite high.</li>
<li>We can set the price impact expectation for the upcoming review even more aggressively, given that the size of the flow x DTV is more significant than in previous cases.</li>
</ul>


Samsung SDI and LG Chem are expected to be newly included in the index, while Hana Financial and KT&amp;G Corporation are predicted to be excluded.
The correlation between the price movement and the flow direction on the rebalancing trading day of constituent changes from the past reviews was quite high.
We can set the price impact expectation for the upcoming review even more aggressively, given that the size of the flow x DTV is more significant than in previous cases.


Price/Flow Impact on Four Constituent Changes in KODEX Top 5 Plus ETF Rebalancing in June

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul>
<li>Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing turbulence on the global banking system.</li>
<li>Our trading strategy is to go long on a basket of three largest banks in Korea (KB, Shinhan, Hana) and go short on a basket of five smaller banks. </li>
<li>Post collapse of SVB Financial, one clear signal appears to be increasing global capital allocation to the "too big to fail banks" and reduced capital allocation to regional banks.</li>
</ul>


Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing turbulence on the global banking system.
Our trading strategy is to go long on a basket of three largest banks in Korea (KB, Shinhan, Hana) and go short on a basket of five smaller banks. 
Post collapse of SVB Financial, one clear signal appears to be increasing global capital allocation to the "too big to fail banks" and reduced capital allocation to regional banks.


Investors' Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial

<ul>
<li>On Friday 10 March, Svb Financial (SIVB US) suddenly collapsed, becoming the largest bank to fail in the United States since the 2008 financial crisis.</li>
<li>In our view, the collapse of SVB Financial will likely have a negative near-term impact on the Korean banks. </li>
<li>Three ways that this will negatively impact Korean banks include risk-off investment sentiment, greater excuse to hold on to cash by Korean banks, and lower interest rate spreads. </li>
</ul>


On Friday 10 March, Svb Financial (SIVB US) suddenly collapsed, becoming the largest bank to fail in the United States since the 2008 financial crisis.
In our view, the collapse of SVB Financial will likely have a negative near-term impact on the Korean banks. 
Three ways that this will negatively impact Korean banks include risk-off investment sentiment, greater excuse to hold on to cash by Korean banks, and lower interest rate spreads. 


Collapse of Silicon Valley Bank (SVB) - Impact on Korean Banks

<ul>
<li>K200 ad hoc change announcement date should be March 30 as the buyback ends on March 28, and rebalancing trading should occur on March 31.</li>
<li>From a juice-level perspective, the entry point and timing for JB Financial showed much better performance from EGM approval rather than the announcement.</li>
<li>We should consider gradually building up positions from this point until March 30 announcement or one day after (T-1 effective) while utilizing Kodex Banks ETF to hedge our long positions.</li>
</ul>


K200 ad hoc change announcement date should be March 30 as the buyback ends on March 28, and rebalancing trading should occur on March 31.
From a juice-level perspective, the entry point and timing for JB Financial showed much better performance from EGM approval rather than the announcement.
We should consider gradually building up positions from this point until March 30 announcement or one day after (T-1 effective) while utilizing Kodex Banks ETF to hedge our long positions.


Meritz Merger Approved: Let's Now Discuss Key Dates & Entry Points For LONG DGB Financial

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Industrial Bank Of Korea / Equity Bottom-Up

<ul>
<li>In our latest South Korean banks screener; we add Industrial Bank of Korea to the buy list alongside Hana Financial; we cut KB Financial to a neutral rating</li>
<li>Industrial Bank of Korea has very attractive multiples and PEG ratio and the best pre-provision and post-provision returns of the peer group, it also has sound broad credit quality metrics</li>
<li>We introduce a broader credit quality metric to the screens and also EPS revisions over the last week and last month to give a sense of earnings momentum changes</li>
</ul>


In our latest South Korean banks screener; we add Industrial Bank of Korea to the buy list alongside Hana Financial; we cut KB Financial to a neutral rating
Industrial Bank of Korea has very attractive multiples and PEG ratio and the best pre-provision and post-provision returns of the peer group, it also has sound broad credit quality metrics
We introduce a broader credit quality metric to the screens and also EPS revisions over the last week and last month to give a sense of earnings momentum changes


South Korean Banks Screener; Highlighting Industrial Bank of Korea (024110 KS)

South Korea

Hana Financial Group Inc., in accordance with Financial Holding Companies Act, was established on December 1, 2005, through stock transfer with the former shareholders of its subsidiaries in order to provide management services and financing to associated companies.

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Hana Financial (086790 KS)

Price/Flow Impact on Four Constituent Changes in KODEX Top 5 Plus ETF Rebalancing in June

This post presents a Long Short basket trade idea on the four potential constituent changes in the KODEX Top 5 Plus TR ETF rebalancing in June.

Sanghyun Park

Investors' Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial

Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing...

Douglas Kim

Collapse of Silicon Valley Bank (SVB) - Impact on Korean Banks

The collapse of SVB Financial will negatively impact Korean banks due to risk-off investment sentiment, greater excuse to hold on to cash by Korean...

Douglas Kim

Meritz Merger Approved: Let's Now Discuss Key Dates & Entry Points For LONG DGB Financial

Entry points and key dates for long positions in DGB Financial following KOSPI 200 ad hoc change due to the Meritz merger

Sanghyun Park

South Korean Banks Screener; Highlighting Industrial Bank of Korea (024110 KS)

We add deep value Industrial Bank of Korea to the buy list along with higher quality Hana Financial and we cut KB Financial to a neutral rating; we...

Victor Galliano

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52-week Range

Market Cap (USDm)

P/E

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