Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samyang-foods-co-ltd" target="_blank" data-smartkarma-citation="entities:9100:1" rel="noopener">Samyang Foods (003230 KS)</a> will replace <a href="https://www.smartkarma.com/entities/hyundai-greenfood-co-ltd" target="_blank" data-smartkarma-citation="entities:19560:1" rel="noopener">Hyundai Greenfood (005440 KS)</a> in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> at the close on 12 April.</li>
<li>We expect <a href="https://www.smartkarma.com/entities/dgb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:6138:1" rel="noopener">DGB Financial Group (139130 KS)</a> will replace <a href="https://www.smartkarma.com/entities/meritz-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:19692:1" rel="noopener">Meritz Securities (008560 KS)</a> in early April.</li>
<li>Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.</li>
</ul>



Samyang Foods (003230 KS) will replace Hyundai Greenfood (005440 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 12 April.
We expect DGB Financial Group (139130 KS) will replace Meritz Securities (008560 KS) in early April.
Then we expect another 3 changes at the regular rebalance in June. The potential adds have moved sharply higher recently and there are flows from other index trackers too.


KOSPI200 Index Rebalance Preview: Changes in April & June

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>On 20 February, KRX announced that effective 13 April 2023, Samyang Foods will be included in the KOSPI 200 index and Hyundai Greenfood will be excluded.</li>
<li>We have a positive view on Samyang Foods and we believe this stock will outperform KOSPI leading into the week of KOSPI 200 inclusion (13 April). </li>
<li>We think that expectation will play a bigger role and some investors may choose to buy this stock ahead of the actual inclusion date.</li>
</ul>


On 20 February, KRX announced that effective 13 April 2023, Samyang Foods will be included in the KOSPI 200 index and Hyundai Greenfood will be excluded.
We have a positive view on Samyang Foods and we believe this stock will outperform KOSPI leading into the week of KOSPI 200 inclusion (13 April). 
We think that expectation will play a bigger role and some investors may choose to buy this stock ahead of the actual inclusion date.


Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals

<ul>
<li>We discuss potential inclusions and exclusions of the upcoming KOSPI 200 rebalance in May 2023. With regards to the upcoming KOSPI 200 rebalance, we like the following long-short trading strategy.</li>
<li>We would short a basket of potential exclusions from KOSPI 200 rebalance which would include the bottom 5% of KOSPI 200 index (10 stocks).</li>
<li>We would go long a basket of potential inclusions in KOSPI 200 rebalance which include four stocks including Dentium, Jeju Air, Samyang Foods, and DGB Financial. </li>
</ul>


We discuss potential inclusions and exclusions of the upcoming KOSPI 200 rebalance in May 2023. With regards to the upcoming KOSPI 200 rebalance, we like the following long-short trading strategy.
We would short a basket of potential exclusions from KOSPI 200 rebalance which would include the bottom 5% of KOSPI 200 index (10 stocks).
We would go long a basket of potential inclusions in KOSPI 200 rebalance which include four stocks including Dentium, Jeju Air, Samyang Foods, and DGB Financial. 


Potential Inclusions & Exclusions in KOSPI 200 Rebalance in May 2023

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-dept-store-co" target="_blank" data-smartkarma-citation="entities:19098:1" rel="noopener">Hyundai Dept Store Co (069960 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-greenfood-co-ltd" target="_blank" data-smartkarma-citation="entities:19560:1" rel="noopener">Hyundai Greenfood (005440 KS)</a> and <a href="https://www.smartkarma.com/entities/oci-co-ltd" target="_blank" data-smartkarma-citation="entities:1904:1" rel="noopener">Oci Co Ltd (010060 KS)</a> will spin-off divisions and list them prior to the next rebalance in June.</li>
<li>The equity spin-offs will result in passive flows prior to the trading suspension as well as on relisting of the stocks post the spin-off.</li>
<li>We expect one change to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> in April as one stock will be deleted due to low market cap following the spin-off.</li>
</ul>



Hyundai Dept Store Co (069960 KS), Hyundai Greenfood (005440 KS) and Oci Co Ltd (010060 KS) will spin-off divisions and list them prior to the next rebalance in June.
The equity spin-offs will result in passive flows prior to the trading suspension as well as on relisting of the stocks post the spin-off.
We expect one change to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in April as one stock will be deleted due to low market cap following the spin-off.


Korea Spin-Offs: Details and KOSPI200 Index Impact

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.

<ul>
<li>From a trading perspective, we should pay attention to the KOSPI 200 corporate actions in Hyundai Department Group's demerger events, as both companies are KOSPI 200 constituents.</li>
<li>Hyundai Green Food's surviving company won't beat the cutoff, resulting in a KOSPI 200 constituent change on April 10. Samyang Foods will be a new addition.</li>
<li>Even the size of KOSPI 200 ETFs that will likely go into mechanical trading on April 10 will cause a significant price impact from a day trading perspective.</li>
</ul>


From a trading perspective, we should pay attention to the KOSPI 200 corporate actions in Hyundai Department Group's demerger events, as both companies are KOSPI 200 constituents.
Hyundai Green Food's surviving company won't beat the cutoff, resulting in a KOSPI 200 constituent change on April 10. Samyang Foods will be a new addition.
Even the size of KOSPI 200 ETFs that will likely go into mechanical trading on April 10 will cause a significant price impact from a day trading perspective.


KOSPI 200 Ad-Hoc Change: Hyundai Greenfood Out & Samyang Foods Fresh Buy-In on April 10

South Korea

BGF Retail Co. Ltd. operates convenience store chains called CU in South Korea. The Company, through company owned stores or franchise, sells general groceries such as food and beverage.  The Company also offers ticketing, parcel pick-up, ATM machine and bill payment service.

CJ Freshway Corp. markets and provides various groceries to food service companies and restaurants.  The Company also caters to company's restaurants, schools, airports, and private restaurants and processes agricultural products.

E-MART Inc. operates E-Mart discount stores. The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

Dongsuh Companies Inc. imports, manufactures, processes, markets and distributes general food products such as vegetable cooking oils. The Company also produces packaging materials and ceramic products including food and oil containers. Dongsuh has a cooperative relationship with Kraft Foods Inc.

BGF Retail Co., Ltd. operates convenience stores. The Company retails delicatessen, sweets, snacks, beverages, tobacco, and other related products. BGF Retail markets its products throughout South Korea.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

Naturecell Co Ltd manufactures fruit beverages, canned beverage, and health functional foods. The Company's prodcuts are tomato juices, peach juice, pineapple juice, orange juice, organic health conscious beverage, and canned yellow peach.  The Company was established in 1971, and its headquarters are located in Korea.

Sajodaerim Corporation specializes in deep sea fishing of pollack, cod, tuna, mackerel, and squid.  The Company's fishing territories cover domestic coastal areas, the North Pacific, South Atlantic, Western Africa, and Southeast Asia. Sajodaerim also manufactures, wholesales, and resells raw fish and processed frozen seafood.

Binggrae Co., Ltd. manufactures dairy food products.  The Company has cold-storage and frozen divisions.  Bonggrae's main items include Banana Flavoured Milk, yogurts, snacks and various types of ice cream.

Dongwon F&B Co., Ltd. manufactures various processed food products. The Company' s products include agricultural and marine products, beverages, dairy products, processed meat, fast food, frozen food, and ginseng. The company's main product in early stage was canned tuna and expanded their business into a variety of food production.

SHOEI FOODS CORPORATION trades foodstuff materials.  The Company trades milk-based products, canned foods, dried fruits, and confectionery.

7-Eleven Malaysia Holdings Berhad owns, operates, and franchises a chain of convenience stores under the 7-Eleven brand name.

Mammy Mart Corporation operates supermarkets in Saitama Prefecture.  The Company mainly operates small scale stores.

RETAIL PARTNERS CO., LTD. operates regional supermarket chain based in Yamaguchi Prefecture.  The Company also sells household utensils, appliances, and clothing.

Cosco Capital, Inc. operates as a retail holding company. The Company owns a diverse portfolio of real estate holdings that includes retail outlets, pharmacy chains, restaurants, wine and liquor distribution businesses, and unibanks. Cosco Capital focuses on the retail, real estate, liquor distribution and oil and mineral exploration industries in the Philippines.

Natural Grocers by Vitamin Cottage Inc through its subsidiary operates in the food industry. The Company provides healthy foods, vitamins, and supplements including allergy, aloe products, amino acids,  antioxidants, animal products, beverages, medical, cleansing and clearance, weight loss,  electrolytes, energy, cosmetics, natural, minerals, vitamins, pain relief, and supplements.

Natural Grocers By Vitamin Cottage (NGVC US)

ITOCHU-SHOKUHIN Co., Ltd. is a wholesaler of alcoholic beverages, general foods, and frozen foods.  The Company's products include beer, sake, distilled spirits, seasonings, canned goods, noodles, dried foodstuffs, confectionery, and processed foods.  Itochu-Shokuhin also plans, develops, and sells gift products.

Taiwan Tea Corporation imports and sells motorcycles, building materials, frozen meats, and copper wires.  The Company also produces tea and operates in the commercial building leasing business.

New Huadu Supercenter Co., Ltd. engages in chain operations in marketplaces, sup ermarkets, department stores.

Cawachi Ltd. operates a chain of drug stores in the Tohoku and Chubu regions. The Company's stores sell products such as pharmaceuticals, cosmetics, health products, foodstuffs, and household consumable goods.  Cawachi also operates a chain of pharmacies.

Hyundai G.F. Holdings Co., Ltd. operates as a office furniture distribution company. The Company produces built in furniture, upcycling waste materials bottles furniture, wood furniture, and other related products. Hyundai G.F. Holdings also offers food, information and technology, groceries sale, and food materials distribution services.

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Hyundai G.F. Holdings (005440 KS)

KOSPI200 Index Rebalance Preview: Changes in April & June

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Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals

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Douglas Kim

Potential Inclusions & Exclusions in KOSPI 200 Rebalance in May 2023

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Douglas Kim

Korea Spin-Offs: Details and KOSPI200 Index Impact

There are three KOSPI200 members that are doing an equity spin-off in the next few months. Two will re-enter the index while one will be deleted....

Brian Freitas

KOSPI 200 Ad-Hoc Change: Hyundai Greenfood Out & Samyang Foods Fresh Buy-In on April 10

This post investigates KOSPI 200 ad-hoc change possibility resulting from Hyundai Greenfood's failure to meet the cutoff, which will lead to the...

Sanghyun Park

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