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>Celltrion Inc (068270 KS)'s deletion seems pretty much a foregone conclusion as its average float-adjusted market cap on May 3-19 is way below the next one in line.</li>
<li>Shinhan Financial (055550 KS) is the one to replace Celltrion based on the numbers so far. There is close to a ₩1T gap with the next one, POSCO (005490 KS).</li>
<li>In this rebalancing, the flow impact of the addition/deletion is even more significant. So, their share price fluctuations on June 10 will likely be more substantial than last time.</li>
</ul>


Celltrion Inc (068270 KS)'s deletion seems pretty much a foregone conclusion as its average float-adjusted market cap on May 3-19 is way below the next one in line.
Shinhan Financial (055550 KS) is the one to replace Celltrion based on the numbers so far. There is close to a ₩1T gap with the next one, POSCO (005490 KS).
In this rebalancing, the flow impact of the addition/deletion is even more significant. So, their share price fluctuations on June 10 will likely be more substantial than last time.


FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>After the market close today, it was announced that KDIC will sell its 1.81% stake of Woori Financial Group. </li>
<li>The block deal price will range from 15,229 won to 15,700 won (0 to 3% discount) and we would take the deal even at little discount.</li>
<li>Woori Financial Group's share price continues to trade at deep valuation multiples as it is trading at P/B of 0.4x and P/E of 3.9x (using 2022 consensus earnings estimates).</li>
</ul>


After the market close today, it was announced that KDIC will sell its 1.81% stake of Woori Financial Group. 
The block deal price will range from 15,229 won to 15,700 won (0 to 3% discount) and we would take the deal even at little discount.
Woori Financial Group's share price continues to trade at deep valuation multiples as it is trading at P/B of 0.4x and P/E of 3.9x (using 2022 consensus earnings estimates).


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

Thematic (Sector/Industry)

<ul>
<li>Allocations in South Korean Financials stocks among Global Value managers are at record highs. </li>
<li>In a remarkable upward trend that started in 2015, Value managers have positioned themselves at record weights, record overweights and with more funds invested than ever before</li>
<li>KB Financial is top dog, accounting for over half of total allocations, half the overweight and held by twice as many Value managers as the second most widely held stock</li>
</ul>


Allocations in South Korean Financials stocks among Global Value managers are at record highs. 
In a remarkable upward trend that started in 2015, Value managers have positioned themselves at record weights, record overweights and with more funds invested than ever before
KB Financial is top dog, accounting for over half of total allocations, half the overweight and held by twice as many Value managers as the second most widely held stock


South Korean Financials: Increasing in Value

<ul>
<li>In this insight, we have identified 16 Korean companies that have announced common shares cancellations in 4Q 2021 and 1Q 2022.</li>
<li>There has been a tremendous outperformance of KOSDAQ listed companies that have announced shares cancellations in this period. </li>
<li>Given the continued outperformance of Korean companies that are outperforming the market after announcing treasury shares cancellation, this reflects an alpha generating trend that bears close scrutiny. </li>
</ul>


In this insight, we have identified 16 Korean companies that have announced common shares cancellations in 4Q 2021 and 1Q 2022.
There has been a tremendous outperformance of KOSDAQ listed companies that have announced shares cancellations in this period. 
Given the continued outperformance of Korean companies that are outperforming the market after announcing treasury shares cancellation, this reflects an alpha generating trend that bears close scrutiny. 


Korean Companies Announcing Share Cancellations Are Outperforming the Market

Equity Bottom-Up

<ul>
<li>Foreigners net purchased 2.6 trillion won worth of five major Korean bank stocks from 8/26/2021 to 2/11/2022. Foreigners were net buyers of 1.8 trillion won worth of KOSPI stocks.</li>
<li>This means that foreigners were net sellers of 0.8 trillion won worth of other KOSPI stocks (excluding the five major banking stocks). </li>
<li>The five major bank stocks in Korea currently have average dividend yield of 5.4%. DPS for the five major Korean banks increased by 70.9% YoY on average in 2021.</li>
</ul>


Foreigners net purchased 2.6 trillion won worth of five major Korean bank stocks from 8/26/2021 to 2/11/2022. Foreigners were net buyers of 1.8 trillion won worth of KOSPI stocks.
This means that foreigners were net sellers of 0.8 trillion won worth of other KOSPI stocks (excluding the five major banking stocks). 
The five major bank stocks in Korea currently have average dividend yield of 5.4%. DPS for the five major Korean banks increased by 70.9% YoY on average in 2021.


Shinhan Financial Group: Chairman Buys Shares, Capital Flows Analysis, & Higher Dividends Likely

South Korea

KB Financial Group Inc. (the "Company"), in accordance with Financial Holding Companies Act, was established on September 29, 2008, through stock transfer with the former shareholders of its subsidiaries including Kookmin Bank in order to provide management services and financing to associated companies. The headquarters are located at Seoul, Korea

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KB Financial (105560 KS)

FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time

This post looks at the current status of the FnGuide Top 10 Index rebalancing as we are halfway through the completion of the review period.

Sanghyun Park

Block Deal Sale of Woori Financial Group

After the market close today, it was announced that KDIC will sell its 1.81% stake of Woori Financial Group. We would take the deal even at little...

Douglas Kim

South Korean Financials: Increasing in Value

Global Value managers have continued to increase exposure, positioning themselves at record weights, record overweights and with more funds...

Steven Holden

Shinhan Financial Group: Chairman Buys Shares, Capital Flows Analysis, & Higher Dividends Likely

Foreigners net purchased 2.6 trillion won worth of five major Korean bank stocks from 8/26/2021 to 2/11/2022. Foreigners were net buyers of 1.8...

Douglas Kim

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time

This post looks at the current status of the FnGuide Top 10 Index rebalancing as we are halfway through the completion of the review period.

Sanghyun Park

Block Deal Sale of Woori Financial Group

After the market close today, it was announced that KDIC will sell its 1.81% stake of Woori Financial Group. We would take the deal even at little...

Douglas Kim

South Korean Financials: Increasing in Value

Global Value managers have continued to increase exposure, positioning themselves at record weights, record overweights and with more funds...

Steven Holden

Korean Companies Announcing Share Cancellations Are Outperforming the Market

Given the continued outperformance of Korean companies that are outperforming the market after announcing shares cancellation, this reflects an...

Douglas Kim

Shinhan Financial Group: Chairman Buys Shares, Capital Flows Analysis, & Higher Dividends Likely

Foreigners net purchased 2.6 trillion won worth of five major Korean bank stocks from 8/26/2021 to 2/11/2022. Foreigners were net buyers of 1.8...

Douglas Kim