Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by the locals). </li>
<li>Stocks that are expected to be included in the KOSPI 200 index include Samyang Foods (003230 KS) and Lotte Confectionery (280360 KS). </li>
<li>Stocks that are expected to be excluded in the KOSPI 200 index include Samyang Holdings (000070 KS) and Boryung Pharmaceutical (003850 KS).</li>
</ul>


This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by the locals). 
Stocks that are expected to be included in the KOSPI 200 index include Samyang Foods (003230 KS) and Lotte Confectionery (280360 KS). 
Stocks that are expected to be excluded in the KOSPI 200 index include Samyang Holdings (000070 KS) and Boryung Pharmaceutical (003850 KS).


KOSPI 200 Rebalance in December Highlighted by Locals

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a> is looking to transfer from the KOSDAQ market to the KOSPI market. Shareholder meeting is 23 September and the transfer will happen soon after if approved.</li>
<li>
<a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> on the suspension date. There is zero chance of the stock being included 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">Kospi 200 Index</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/nextin-inc" target="_blank" data-smartkarma-citation="entities:36097:1" rel="noopener">Nextin (348210 KS)</a> is a high probability inclusion to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> in December but could be an early inclusion in  September to replace <a href="https://www.smartkarma.com/entities/lx-semicon-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">LX Semicon (108320 KS)</a>.</li>
</ul>



LX Semicon (108320 KS) is looking to transfer from the KOSDAQ market to the KOSPI market. Shareholder meeting is 23 September and the transfer will happen soon after if approved.

LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index on the suspension date. There is zero chance of the stock being included in the Kospi 200 Index.

Nextin (348210 KS) is a high probability inclusion to the KOSDAQ 150 Index in December but could be an early inclusion in  September to replace LX Semicon (108320 KS).


LX Semicon (108320 KS) - Section Change, Index Flow and KOSDAQ150 Replacement

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>LX Semicon announced that its board approved KOSPI migration on August 17. This migration requires shareholder approval, and a shareholder meeting will be scheduled for September 23.</li>
<li>The outflow of KOSDAQ 150 is estimated to be -1.37x ADTV. A passive impact of this magnitude should cause a price movement of at least 3%p.</li>
<li>But LX Semicon's GICS sector won't change after the KOSPI migration. We should refrain from trading with expectations for the possibility of KOSPI 200 inclusion at this point.</li>
</ul>


LX Semicon announced that its board approved KOSPI migration on August 17. This migration requires shareholder approval, and a shareholder meeting will be scheduled for September 23.
The outflow of KOSDAQ 150 is estimated to be -1.37x ADTV. A passive impact of this magnitude should cause a price movement of at least 3%p.
But LX Semicon's GICS sector won't change after the KOSPI migration. We should refrain from trading with expectations for the possibility of KOSPI 200 inclusion at this point.


LX Semicon KOSDAQ→KOSPI Migration Event: Index Rebalance Trading

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Market dynamics have mildly deteriorated in recent weeks on concerns over less accommodative monetary policy and the Omicron variant.</li>
<li>Despite recent deterioration, critical supports are holding on the broad global indexes, and our global outlook remains neutral as we continue to expect more consolidation and mixed markets.</li>
<li>Growth continues to outperform relative to value. Actionable Themes: Services, Technology, and Consumer Discretionary.</li>
</ul>


Market dynamics have mildly deteriorated in recent weeks on concerns over less accommodative monetary policy and the Omicron variant.
Despite recent deterioration, critical supports are holding on the broad global indexes, and our global outlook remains neutral as we continue to expect more consolidation and mixed markets.
Growth continues to outperform relative to value. Actionable Themes: Services, Technology, and Consumer Discretionary.


Add To Growth On This Pullback; Actionable Themes: Services, Technology, and Consumer Discretionary

<ul>
<li>Another thing to consider in strategic trades aimed at the buying trend for yearend dividend hunting is the ₩1B majority shareholder transfer tax-triggered selling trend.</li>
<li>But the degree of direct conflict between the buying force targeting dividends and this factor at the point close to the ex-dividend date should not be as large as expected.</li>
<li>Considering a gradual preemptive sale of yearend tax evasion until the ex-dividend, we should consider shortening the trading time frame of the yearend dividend play close to the ex-dividend.</li>
</ul>


Another thing to consider in strategic trades aimed at the buying trend for yearend dividend hunting is the ₩1B majority shareholder transfer tax-triggered selling trend.
But the degree of direct conflict between the buying force targeting dividends and this factor at the point close to the ex-dividend date should not be as large as expected.
Considering a gradual preemptive sale of yearend tax evasion until the ex-dividend, we should consider shortening the trading time frame of the yearend dividend play close to the ex-dividend.


Yearend Dividend-Hunt Buying Vs. Majority Shareholder Transfer Tax-Triggered Selling

South Korea

LX Semicon Co., Ltd. designs, develops, and markets mixed-signal semiconductors. The Company utilizes its own algorithm and technologies to enhance the features and capabilities of flat panel displays that are used in electronic devices and mobile handsets. LX Semicon markets its products worldwide.

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LX Semicon (108320 KS)

KOSPI 200 Rebalance in December Highlighted by Locals

This article discusses the potential inclusions and exclusions of KOSPI 200 rebalance in December 2022 (especially those that are highlighted by...

Douglas Kim