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>
 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.</li>
<li>Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.</li>
<li>These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.</li>
</ul>



 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.
Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.
These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.


TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>At the end of September 2022, Korean stocks accounted for 13.6% of total assets of the NPS whose target for domestic stock exposure is 15.9% by end of this year. </li>
<li>In recent months, NPS has been net increasing purchases of companies including Naver, Celltrion, POSCO Chemical, Samsung Life Insurance, and Krafton. </li>
<li>Although the allowable range for SAA by NPS is ±3%p, there is some leeway for NPS to add to the domestic equities given that they were much lower than target. </li>
</ul>


At the end of September 2022, Korean stocks accounted for 13.6% of total assets of the NPS whose target for domestic stock exposure is 15.9% by end of this year. 
In recent months, NPS has been net increasing purchases of companies including Naver, Celltrion, POSCO Chemical, Samsung Life Insurance, and Krafton. 
Although the allowable range for SAA by NPS is ±3%p, there is some leeway for NPS to add to the domestic equities given that they were much lower than target. 


NPS Could Raise Investments in Korean Stocks in December 2022

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

<ul>
<li>South Korea moves to the bottom of the 'big 4' as managers aggressively rotate portfolios in 2022.</li>
<li>Nearly a 5th of Asia Ex-Japan managers made the switch to underweight over the last 6-months, pushing allocations to their lowest levels in over a decade. </li>
<li>KakaoBank, Samsung SDI, Kakao Corp and Samsung Electronics Pref Shares saw allocations fall the most.</li>
</ul>


South Korea moves to the bottom of the 'big 4' as managers aggressively rotate portfolios in 2022.
Nearly a 5th of Asia Ex-Japan managers made the switch to underweight over the last 6-months, pushing allocations to their lowest levels in over a decade. 
KakaoBank, Samsung SDI, Kakao Corp and Samsung Electronics Pref Shares saw allocations fall the most.


Asia Ex-Japan Funds Rotate Out of South Korea

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> has recently received FDA approval for Vegzelma, a biosimilar to the reference product Avastin (bevacizumab), for the treatment of multiple types of cancer.</li>
<li>Apart from Celltrion, FDA has already approved three Avastin biosimilars. With increasing competition, ASP for the market leader Mvasi in the U.S. declined 39% y/y and 21% q/q in 2Q22.</li>
<li>Despite being present in the U.S. oncology biosimilar market for quite a long time, Celltrion has not been able to gain dominant market share for its existing products.</li>
</ul>



Celltrion Inc (068270 KS) has recently received FDA approval for Vegzelma, a biosimilar to the reference product Avastin (bevacizumab), for the treatment of multiple types of cancer.
Apart from Celltrion, FDA has already approved three Avastin biosimilars. With increasing competition, ASP for the market leader Mvasi in the U.S. declined 39% y/y and 21% q/q in 2Q22.
Despite being present in the U.S. oncology biosimilar market for quite a long time, Celltrion has not been able to gain dominant market share for its existing products.


Celltrion (068270 KS): Competition Makes US Approval of New Oncology Biosimilar Unappealing

<ul>
<li>There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.</li>
<li>Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.</li>
<li>LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.</li>
</ul>


There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.
Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.
LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.


TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging

South Korea

Celltrion, Inc. produces and sells biosimilar products, as well as consignment processing services for other businesses.

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Celltrion (068270 KP)

TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

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Sanghyun Park

NPS Could Raise Investments in Korean Stocks in December 2022

At the end of September 2022, Korean stocks accounted for 13.6% of total assets of the NPS whose target for domestic stock exposure is 15.9% by end...

Douglas Kim

Asia Ex-Japan Funds Rotate Out of South Korea

Active Asia Ex-Japan managers have rotated away from South Korean stocks in 2022, pushing allocations towards their lowest level in over a decade.

Steven Holden

Celltrion (068270 KS): Competition Makes US Approval of New Oncology Biosimilar Unappealing

Celltrion got FDA approval for its oncology biosimilar Vegzelma. However, increasing competition and price erosion in the US market, lessen...

Tina Banerjee

TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging

This post investigates the current rebalancing status of the TIGER Top 10 ETF, the largest AUM sector ETF in Korea, and previews the resulting...

Sanghyun Park

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