Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 30 July, it was reported that IMM Private Equity (PE) sold a 2.3% stake (16.78 million shares) of Woori Financial Group (WFG), which was worth 264 billion won. </li>
<li>Block deal sale price was 15,737 won (0.4% higher than current price). Today's block deal sale represents a second block deal sale of Woori Financial by IMM PE in 2024. </li>
<li>Under the mid-to-long term Value Up program, Woori Financial Group aims to achieve a sustainable ROE of 10% and total shareholder returns of 50%.</li>
</ul>


On 30 July, it was reported that IMM Private Equity (PE) sold a 2.3% stake (16.78 million shares) of Woori Financial Group (WFG), which was worth 264 billion won. 
Block deal sale price was 15,737 won (0.4% higher than current price). Today's block deal sale represents a second block deal sale of Woori Financial by IMM PE in 2024. 
Under the mid-to-long term Value Up program, Woori Financial Group aims to achieve a sustainable ROE of 10% and total shareholder returns of 50%.


Block Deal Sale Of 2.3% Stake in Woori Financial and Highlights of Its Corporate Value Up Program

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Equity Bottom-Up

<ul>
<li>We screen for stocks at the extreme ends of their positioning or momentum ranges among active Asia Ex-Japan equity funds.</li>
<li>High Positioning, Negative Momentum: AIA Group Limited, Shenzhen Inovance Technology </li>
<li>Low Positioning, Positive Momentum: New Oriental Education &amp; Technology Group, Shinhan Financial Group</li>
</ul>


We screen for stocks at the extreme ends of their positioning or momentum ranges among active Asia Ex-Japan equity funds.
High Positioning, Negative Momentum: AIA Group Limited, Shenzhen Inovance Technology 
Low Positioning, Positive Momentum: New Oriental Education &amp; Technology Group, Shinhan Financial Group


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>Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.</li>
<li>We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.</li>
<li>Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.</li>
</ul>


Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.
We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.
Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.


Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

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>The <a href="https://www.smartkarma.com/entities/samsung-kodex-top5plus-total-return-etf" target="_blank" data-smartkarma-citation="entities:36723:1" rel="noopener">Samsung KODEX Top5Plus Total Return ETF (315930 KS)</a> tracks the FnGuide Top 5 Plus Index and has an AUM of KRW 1,357bn (~US$1bn).</li>
<li>We currently see a high probability of <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> replacing <a href="https://www.smartkarma.com/entities/kt-g-corp" target="_blank" data-smartkarma-citation="entities:9320:1" rel="noopener">KT&amp;G Corporation (033780 KS)</a> in the index at the June rebalance.</li>
<li>There is between 1-2 days of ADV to trade on the potential add and delete and smaller flows on the other index members due to capping and funding changes.</li>
</ul>


The Samsung KODEX Top5Plus Total Return ETF (315930 KS) tracks the FnGuide Top 5 Plus Index and has an AUM of KRW 1,357bn (~US$1bn).
We currently see a high probability of Celltrion Inc (068270 KS) replacing KT&amp;G Corporation (033780 KS) in the index at the June rebalance.
There is between 1-2 days of ADV to trade on the potential add and delete and smaller flows on the other index members due to capping and funding changes.


FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G

<ul>
<li>The <a href="https://www.smartkarma.com/entities/mirae-asset-tiger-top-10-etf" target="_blank" data-smartkarma-citation="entities:36042:1" rel="noopener">Mirae Asset Tiger Top 10 ETF (292150 KS)</a> tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.</li>
<li>We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.</li>
<li>The trade has performed well historically with positive performance till implementation followed by reversion post implementation.</li>
</ul>


The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.
We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.
The trade has performed well historically with positive performance till implementation followed by reversion post implementation.


FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

South Korea

Shinhan Financial Group Co., Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.  The company's main businesses include banking, securities brokerage, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Shinhan Financial (055550 KS)

Block Deal Sale Of 2.3% Stake in Woori Financial and Highlights of Its Corporate Value Up Program

On 30 July, it was reported that IMM Private Equity (PE) sold a 2.3% stake (16.78 million shares) of Woori Financial Group (WFG), which was worth...

Douglas Kim

Asia Ex-Japan: Extreme Stocks

We screen for stocks at the extreme ends of their positioning or momentum ranges. We combine current and historical data with recent manager...

Steven Holden

Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

This post explores the feasibility and key targets of a proactive flow trading setup aimed at Korea's value-up plan disclosures.

Sanghyun Park

FnGuide Top 5 Plus Index Rebalance Preview: Celltrion Could Replace KT&G

Celltrion could replace KT&G in the FnGuide Top5 Plus Index in June. Passives will need to buy 1x ADV in Celltrion and sell 2x ADV in KT&G. There...

Brian Freitas

FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

There could be two changes for the FnGuide Top 10 Index in June. Historically, the adds have outperformed the deletes pre-implementation and there...

Brian Freitas

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