Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>In this insight, we discuss near-term momentum trading opportunities among the top 50 stocks in KOSPI with highest short interest ratios.</li>
<li>Given the recent temporary ban on stock short selling in Korea, there is likely to be increased volatility in the stock market. </li>
<li>We have identified 10 companies in particular that have high short interest ratios, among the worst performing stocks YTD, but with strongest share price performance in the past two days.</li>
</ul>


In this insight, we discuss near-term momentum trading opportunities among the top 50 stocks in KOSPI with highest short interest ratios.
Given the recent temporary ban on stock short selling in Korea, there is likely to be increased volatility in the stock market. 
We have identified 10 companies in particular that have high short interest ratios, among the worst performing stocks YTD, but with strongest share price performance in the past two days.


Momentum Trading Opportunities Among Top 50 Stocks in KOSPI With Highest Short Interest Ratios

<ul>
<li>After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE which represents 569 billion won in amount at current price. </li>
<li>The actual block deal amount is likely to be less than 569 billion won as there will likely be a  block deal discount rate. </li>
<li>We would avoid this deal, mainly because we think HYBE is overvalued relative to its peers. </li>
</ul>


After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE which represents 569 billion won in amount at current price. 
The actual block deal amount is likely to be less than 569 billion won as there will likely be a  block deal discount rate. 
We would avoid this deal, mainly because we think HYBE is overvalued relative to its peers. 


Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> Index is currently rising for the 3rd week in a row and approaching the Q2 WEEKLY resistance level, but it's a very weak rally.</li>
<li>Between 329 and 331 there id a good area to go SHORT, the index could fall for 2-3 weeks from here, into early November.</li>
<li>A negative close in October would be =3 months down in a row (CC=-3), November in that case would have good odds for a rebound and close up.</li>
</ul>


The KOSPI 200 Index is currently rising for the 3rd week in a row and approaching the Q2 WEEKLY resistance level, but it's a very weak rally.
Between 329 and 331 there id a good area to go SHORT, the index could fall for 2-3 weeks from here, into early November.
A negative close in October would be =3 months down in a row (CC=-3), November in that case would have good odds for a rebound and close up.


EQD | KOSPI 200 Frail WEEKLY Rally Is Ending

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>An ad hoc <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> rebalance will be implemented at the close on 17 October with <a href="https://www.smartkarma.com/entities/light-wonder-inc-7e7d040f-e811-4fb9-9710-796a39af299e" target="_blank" data-smartkarma-citation="entities:40171:1" rel="noopener">Light &amp; Wonder (LNW AU)</a> replacing <a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG AU)</a>. </li>
<li>The rebalances of <a href="https://www.smartkarma.com/entities/wisdomtree-emerging-markets-146edc02-f8a5-4ac5-968b-5f0f7c89e476" target="_blank" data-smartkarma-citation="entities:32683:1" rel="noopener">Wisdomtree Emerging Markets (DEM US)</a>, <a href="https://www.smartkarma.com/entities/wisdomtree-em-small-cap" target="_blank" data-smartkarma-citation="entities:32679:1" rel="noopener">Wisdomtree Em Small Cap (DGS US)</a> and <a href="https://www.smartkarma.com/entities/wisdmtree-emerg-mkt-ex-st-ow" target="_blank" data-smartkarma-citation="entities:32798:1" rel="noopener">Wisdmtree Emerg Mkt Ex-St Ow (XSOE US)</a> will be implemented on 18 October.</li>
<li>There were net outflows from onshore China ETFs with inflows to larger cap ETFs and outflows mainly from the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI Smallcap 500 Index</a> and CSI 1000 Index trackers.</li>
</ul>


An ad hoc S&amp;P/ASX 200 (AS51 INDEX) rebalance will be implemented at the close on 17 October with Light &amp; Wonder (LNW AU) replacing United Malt Group Ltd (UMG AU). 
The rebalances of Wisdomtree Emerging Markets (DEM US), Wisdomtree Em Small Cap (DGS US) and Wisdmtree Emerg Mkt Ex-St Ow (XSOE US) will be implemented on 18 October.
There were net outflows from onshore China ETFs with inflows to larger cap ETFs and outflows mainly from the CSI Smallcap 500 Index and CSI 1000 Index trackers.


Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

<ul>
<li>
<a href="https://www.smartkarma.com/entities/posco-dx-co-ltd" target="_blank" data-smartkarma-citation="entities:5198:1" rel="noopener">Posco DX (022100)</a>, <a href="https://www.smartkarma.com/entities/kum-yang-co-ltd" target="_blank" data-smartkarma-citation="entities:10364:1" rel="noopener">Kum Yang (001570)</a>, <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670)</a>, <a href="https://www.smartkarma.com/entities/lotte-energy-materials-corporation" target="_blank" data-smartkarma-citation="entities:7709:1" rel="noopener">Lotte Energy Materials (020150)</a>, <a href="https://www.smartkarma.com/entities/kakao-games-corp" target="_blank" data-smartkarma-citation="entities:26730:1" rel="noopener">Kakao Games (293490)</a>, <a href="https://www.smartkarma.com/entities/pan-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:5279:1" rel="noopener">Pan Ocean (028670)</a>, <a href="https://www.smartkarma.com/entities/bgf-retail-co-ltd" target="_blank" data-smartkarma-citation="entities:26731:1" rel="noopener">BGF retail (282330)</a>, <a href="https://www.smartkarma.com/entities/netmarble-corp" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble (251270)</a> have been on investors/traders radars recently.</li>
<li>There could be liquidity events in some of the stocks next month as passive index trackers look to buy/sell the stocks.</li>
<li>Foreign investors have sold <a href="https://www.smartkarma.com/entities/lotte-energy-materials-corporation" target="_blank" data-smartkarma-citation="entities:7709:1" rel="noopener">Lotte Energy Materials (020150 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-games-corp" target="_blank" data-smartkarma-citation="entities:26730:1" rel="noopener">Kakao Games (293490 KS)</a>, <a href="https://www.smartkarma.com/entities/pan-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:5279:1" rel="noopener">Pan Ocean (028670 KS)</a> and <a href="https://www.smartkarma.com/entities/netmarble-corp" target="_blank" data-smartkarma-citation="entities:22839:1" rel="noopener">Netmarble (251270 KS)</a> while buying <a href="https://www.smartkarma.com/entities/bgf-retail-co-ltd" target="_blank" data-smartkarma-citation="entities:26731:1" rel="noopener">BGF retail (282330 KS)</a>. </li>
</ul>



Posco DX (022100), Kum Yang (001570), SK Telecom (017670), Lotte Energy Materials (020150), Kakao Games (293490), Pan Ocean (028670), BGF retail (282330), Netmarble (251270) have been on investors/traders radars recently.
There could be liquidity events in some of the stocks next month as passive index trackers look to buy/sell the stocks.
Foreign investors have sold Lotte Energy Materials (020150 KS), Kakao Games (293490 KS), Pan Ocean (028670 KS) and Netmarble (251270 KS) while buying BGF retail (282330 KS). 


Korea - Positioning in Stocks That Could Have Global Passive Flows

South Korea

Pearl Abyss Corp. operates as a computer games making company. The Company offers games development, games exporting, and other services. Pearl Abyss serves customers worldwide.

HYBE Co., Ltd. operates as an entertainment company. The Company provides music production, album distribution, entertainers management, publicity, planning, training, and other services. HYBE also makes television shows.

Kakao Games Corp. operates as a multiply platform gaming company. The Company provides mobile games, computer games, virtual reality games, and other related products. Kakao Games markets its products worldwide.

LG Uplus Corp., an affiliate of LG Group, provides a wide range of personal communications services (PCS) using code division multiple access (CDMA) technology.  The Company offers call forwarding, call and data transfer, call waiting, voice mail, Internet-phone, prepaid call, and authentication text-to-speech (TTS) services.

LS Cable & System Asia Ltd. provides and offers cable products.  The Company manufactures and markets electric and telecommunication cables, head transmission lines, voltage cables and industrial specialty cables for the energy, infrastructure, construction, automotive, railway, telecommunication and electronics industries.

KT Corporation provides telecommunication services including local, long distance, and international calling, satellite communication, data transmission, and wireless telephone services in South Korea.  The Company also offers network portal and high-speed Internet access services using asymmetric digital subscriber lines (ADSLs).

KINX INC is the Internet linkage and line adapter service providing firm.  The Company provides IX and Internet Data Center service to the network service providers to reduce the traffic and to contruct Internet infrastructure.  KINX also provides VoIP service.

KRTnet Corporation provides radio relay services for mobile phone companies by building and maintaining relay station.  The Company also manufactures telecommunication equipment used for radio relay station.

Sejong Telecom, Inc. develops and provides various telecom service.  The Company's main service include international phone call, Internet phone call, and long distance call.

Solborn Inc. is holding company. Through its subsidiaries, the company engage in medical image processing systems, Newspaper publishing, and printing business.

China Ruyi Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on online streaming video and internet community businesses. China Ruyi Holdings also manufactures and sells photographic, electronic, and multimedia accessories.

37 Interactive Entertainment Network Technology Group Co.,Ltd designs, develops, and operates mobile games and web games. The Company also provides game promotion, customer service, top-up payment, and other services. 37 Interactive Entertainment Network Technology Group conducts its businesses in China.

37 Interactive Entertainment N (002555 CH)

Lions Gate Entertainment Corporation develops and distributes film entertainment contents. The Company produces motion pictures, television programming, animation, and digital media. Lions Gate Entertainment serves customers worldwide.

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

Kunlun Tech Co., Ltd. offers comprehensive Internet value-added services. The Company focuses on social network interactive and online game fields. Kunlun Tech also provides localized translation outsourcing and agency advertising services.

AMC Entertainment Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides theatrical exhibition, movie screening, food distribution, online ticket booking, and other related services. AMC Entertainment offers movie theaters worldwide.

Zhejiang Huace Film & TV Co., Ltd. specializes in entertainment media production. The Company's products include Mandarin films, TV programs and advertisements.

Zhejiang Huace Film & Televisi (300133 CH)

Saregama India Limited manufactures, sells and deals in Audio Cassettes, CD's and DVDs, which they market in India, Europe, the USA, Canada, the Caribbean Islands and South Africa. The Group's range of music encompasses both new and old Hindi films, regional films, ghazals, classical, Indipop and International. Saregama also has a film business, which produces films and TV serials.

Modern Times Group MTG AB is a strategic and operational investment holding company in esports and gaming entertainment. Founded in Sweden, the shares are listed on Nasdaq Stockholm ('MTGA' and 'MTGB').

Tips Industries Limited operates a music production company.  The Group owns the rights to over 3,500 music titles, in addition to the soundtrack copyrights to over 50 Hindi movies.  Tips has offices in the United States, Dubai and England, where they operate via licensing agreements.  They also distribute products in South Africa, Israel and Malaysia.

Netmarble Corporation develops and publishes mobile games. The Company develops and publishes casual games, action, sports games, strategy, simulation games, and social casino games. Netmarble offers services worldwide.

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Netmarble (251270 KS)

Momentum Trading Opportunities Among Top 50 Stocks in KOSPI With Highest Short Interest Ratios

We have identified 10 companies in KOSPI that have high short interest ratios, among the worst performing stocks YTD, but with strongest share...

Douglas Kim

Block Deal Sale of HYBE by Netmarble

After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE. We would avoid this deal, mainly because we...

Douglas Kim

EQD | KOSPI 200 Frail WEEKLY Rally Is Ending

The KOSPI 200 Index is rising for the 3rd week but it's a weak rally. Go SHORT between 329 and 331, hold 2-3 weeks. A negative close in October...

Nico Rosti

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Korea - Positioning in Stocks That Could Have Global Passive Flows

There could be a big reshuffle in Korean passive portfolios in November as stocks are added/deleted. Shorts have increased on a lot of stocks and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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Momentum Trading Opportunities Among Top 50 Stocks in KOSPI With Highest Short Interest Ratios

We have identified 10 companies in KOSPI that have high short interest ratios, among the worst performing stocks YTD, but with strongest share...

Douglas Kim

Block Deal Sale of HYBE by Netmarble

After the market close on 6 November, Netmarble announced that it will sell 2.5 million shares of HYBE. We would avoid this deal, mainly because we...

Douglas Kim

EQD | KOSPI 200 Frail WEEKLY Rally Is Ending

​The KOSPI 200 Index is rising for the 3rd week but it's a weak rally. Go SHORT between 329 and 331, hold 2-3 weeks. A negative close in October...

Nico Rosti

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Korea - Positioning in Stocks That Could Have Global Passive Flows

There could be a big reshuffle in Korean passive portfolios in November as stocks are added/deleted. Shorts have increased on a lot of stocks and...

Brian Freitas

The KOSPI 200 Index is rising for the 3rd week but it's a weak rally. Go SHORT between 329 and 331, hold 2-3 weeks. A negative close in October...