Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).</li>
<li>The reference period for the June 2024 index rebal event ended recently. In this insight, we take a look at our final expected ADDs/DELs.</li>
<li><em>There has been one change to our list of expected ADDs presented in my last insight (<a href="https://www.smartkarma.com/insights/quiddity-leaderboard-kospi-200-jun-24-four-changes-likely" target="_blank" rel="noopener">link</a>).</em></li>
</ul>


KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
The reference period for the June 2024 index rebal event ended recently. In this insight, we take a look at our final expected ADDs/DELs.
There has been one change to our list of expected ADDs presented in my last insight (link).


Quiddity Leaderboard KOSPI 200 Jun 24: One Last-Minute Change to Rankings

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>Ssangyong C&amp;E will be excluded in June pre-delisting due to the float rate rule. Replacement will be chosen from the highest market cap existing constituents excluded in the June review.</li>
<li>Likely owing to the recent expansion of macro variables in the local market, a clear correlation between results and price impact is not observed even at the screening period's conclusion.</li>
<li>There's a chance of price impact closer to the effective date, suggesting potentially more effective basket trading. However, short instrument absence necessitates using market indices as hedges.</li>
</ul>


Ssangyong C&amp;E will be excluded in June pre-delisting due to the float rate rule. Replacement will be chosen from the highest market cap existing constituents excluded in the June review.
Likely owing to the recent expansion of macro variables in the local market, a clear correlation between results and price impact is not observed even at the screening period's conclusion.
There's a chance of price impact closer to the effective date, suggesting potentially more effective basket trading. However, short instrument absence necessitates using market indices as hedges.


Addressing Areas of Confusion Surrounding the KOSPI 200 June Rebalancing

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>With the review period complete, there could be up to 5 changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the June rebalance.</li>
<li>Hahn&amp;Co now own over 96% of the shares in <a href="https://www.smartkarma.com/entities/ssangyong-cement-industrial-co-ltd" target="_blank" data-smartkarma-citation="entities:9345:1" rel="noopener">Ssangyong Cement Industrial (003410 KS)</a> and there could be another change at or before the June rebalance.</li>
<li>Passive trackers will need to trade between 0.5-15x ADV on the index changes. There are big shorts in <a href="https://www.smartkarma.com/entities/l-f-co-ltd" target="_blank" data-smartkarma-citation="entities:14300:1" rel="noopener">L&amp;F (066970 KS)</a> and <a href="https://www.smartkarma.com/entities/lotte-tour-development-co-ltd" target="_blank" data-smartkarma-citation="entities:5526:1" rel="noopener">Lotte Tour Development Co, Ltd. (032350 KS)</a>. </li>
</ul>


With the review period complete, there could be up to 5 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance.
Hahn&amp;Co now own over 96% of the shares in Ssangyong Cement Industrial (003410 KS) and there could be another change at or before the June rebalance.
Passive trackers will need to trade between 0.5-15x ADV on the index changes. There are big shorts in L&amp;F (066970 KS) and Lotte Tour Development Co, Ltd. (032350 KS). 


KOSPI200 Index Rebalance Preview: 5-6 Changes Possible from Now to June

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Capital Markets

HD Hyundai Marine Solution  / Equity Capital Markets

<ul>
<li>In this insight, we review the share price performances of the top 13 IPOs (in terms of market cap) in Korea in the past 8 months. </li>
<li>We review the the share price performances over different time periods (1 day, 1 week,  and 1 month). We also analyze the demand ratios and lock-up periods of the IPOs. </li>
<li>On average, 12.7% of the IPO shares are under lockup periods for the 13 companies listed below. HD Hyundai Marine Solution IPO has 45.8% of shares under lock-up.</li>
</ul>


In this insight, we review the share price performances of the top 13 IPOs (in terms of market cap) in Korea in the past 8 months. 
We review the the share price performances over different time periods (1 day, 1 week,  and 1 month). We also analyze the demand ratios and lock-up periods of the IPOs. 
On average, 12.7% of the IPO shares are under lockup periods for the 13 companies listed below. HD Hyundai Marine Solution IPO has 45.8% of shares under lock-up.


A Review of Post IPO Price Performance of Top 13 IPOs in Korea Past 8 Months

<ul>
<li>Around 85% of the way through the review period, we see four changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the June rebalance.</li>
<li>The impact on the potential inclusions ranges from 0.4-8 days of ADV while the impact on the potential deletions varies from 1-13 days of ADV.</li>
<li>
<a href="https://www.smartkarma.com/entities/hanmi-semiconductor-co-ltd" target="_blank" data-smartkarma-citation="entities:15587:1" rel="noopener">Hanmi Semiconductor (042700 KS)</a> is up 72% in the last two months following its appearance on the list of potential <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> inclusions in June.</li>
</ul>


Around 85% of the way through the review period, we see four changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance.
The impact on the potential inclusions ranges from 0.4-8 days of ADV while the impact on the potential deletions varies from 1-13 days of ADV.

Hanmi Semiconductor (042700 KS) is up 72% in the last two months following its appearance on the list of potential Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusions in June.


KOSPI200 Index Rebalance Preview: Hanmi Semiconductor (042700 KS) Flying High

South Korea

Hyundai Rotem Company Ltd. manufactures railroad equipment and defense vehicles. The Company produces high-speed trains, light rail vehicles, locomotives, and passenger coaches, main battle tanks, armored recovery vehicles, and related defense equipment. Hyundai Rotem operates worldwide.

Bobcat Company specializes in design, manufacture, marketing and distribution of compact equipment for construction, rental, landscaping, agriculture, grounds maintenance, government, utility, industry and mining.

Hyundai Mipo Dockyard Co., Ltd. is shipbuilders in the sectors of medium-sized conventional ships and specialized vessels. The Company constructs and delivers medium-ranged product carriers, chemical tankers, containerships, LPG carriers, pure car truck carriers and others.

Samsung Heavy Industries Co., Ltd. manufactures crude oil tankers, container vessels, bulk carriers, cruisers, and passenger ferries.  The Company also produces steel and bridge structures, and material handling equipment.  In addition, Samsung Heavy Industries provides civil engineering, architectural, and plant construction services.

Hyundai Elevator Co., Ltd. (HELCO) manufactures, installs, sells, and services elevators, escalators, moving walkways, automated parking systems, and material handling systems.  The Company also produces screen doors used on platforms in train stations.

Hanwha Ocean Co., Ltd. operates as a shipbuilding and offshore company. The Company provides floating structure construction, steel wire drying, commercial vessels, specialty vessels, gas carrier, tanker, containership, ro ro, bulk carrier, submarine, warship, auxiliaries, cruise ships, and ferries manufacturing services. Hanwha Ocean also offers onshore plants services.

HSD Engine Co., Ltd. is an integrated engine manufacturer specializing in producing diesel engine for large vessels. The Company provides business in diesel power plant construction and operation, engine parts sales, and engine maintenance and repair services.

People and Technology INC is a company manufacturing in Secondary Battery and Semiconductors.

STX Heavy Industries Co., Ltd. manufactures diesel engine components for ships. The Company's products include crank shafts, cylinder liners, turbo chargers, and cargo pumps.

Sejin Heavy Industries Co. Ltd., operates a shipbuilding firm.  The Company manufactures ship components such as Deck House and Liquified Petroleum Gas (LPG) Tank.

Sejin Heavy Industries Co Ltd (075580 KS)

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

Terex Corporation is a diversified global manufacturer operating in four business segments: aerial work platforms; construction; cranes; and materials processing.  Terex manufactures a broad range of equipment for use in various industries including the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.

Zhengzhou Coal Mining Machinery Group Co., Ltd. develops and manufactures hydraulic support in coal industry.  The Company's products include two legs hydraulic support, four legs hydraulic support, caving support, and hydraulic valve.

Zhengzhou Coal Mining Machinery Group Co (601717 CH)

Avic Heavy Machinery Co., Ltd. develops, manufactures, and markets hydraulic pumps and motors, Rzeppa constant velocity joints, and other  related products.

SUMITOMO HEAVY INDUSTRIES, LTD. manufactures and markets heavy electric machinery.  The Company's operations include heavy machinery, shipbuilding, mass-production machinery, environmental equipment, and construction machinery divisions.  Sumitomo Heavy Industries also produces equipment for semiconductor and laser technologies.

EnPro Industries, Inc. designs, develops, manufactures, and markets proprietary engineered industrial products.  The Company's products include sealing products, metal polymer bearing products, air compressor systems and vacuum pumps, diesel and natural gas engines, and specialized tooling.  EnPro sells its products to customers located around the world.

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

Commercial Engineers & Body Builders Company Ltd. builds truck and locomotive bodies.  The Company produces dump truck, tanker, cargo box, skip-loader, garbage, troop carrier, prison van, fire engine and ambulance bodies; and locomotive, boxcar and passenger coach bodies.

Mueller Water Products, Inc. manufactures a broad range of water infrastructure and flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and fire protection piping systems. The Company's product portfolio includes engineered valves, hydrants, pipe fittings and ductile iron pipe.

SKF India Ltd. manufactures a wide range of ball and roller bearings, such as deep groove, taper roller and other types.  Bearings are used by a number of industries, including the automotive, electrical, power generation, cement, steel, petrochemical and textile industries.

Doosan Robotics Inc. develops and manufactures industrial equipment. The Company manufactures robots, linear actuation devices, automated production equipment, and other products. Doosan Robotics conducts businesses in South Korea.

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Doosan Robotics (454910 KS)

Quiddity Leaderboard KOSPI 200 Jun 24: One Last-Minute Change to Rankings

The KOSPI 200 rebal reference period is now finished. There is one change to our expectations for the June 2024 index review based on a share...

Travis Lundy

Addressing Areas of Confusion Surrounding the KOSPI 200 June Rebalancing

This post aims to provide clarity on several aspects of confusion surrounding the KOSPI 200 regular rebalancing in June.

Sanghyun Park

KOSPI200 Index Rebalance Preview: 5-6 Changes Possible from Now to June

There could be 5-6 changes for the KOSPI200 from now to June. Watch for the HD Hyundai Marine listing too. Impact is between 5-15x ADV and there...

Brian Freitas

A Review of Post IPO Price Performance of Top 13 IPOs in Korea Past 8 Months

In this insight, we review the share price performances of the top 13 IPOs (in terms of market cap) in Korea in the past 8 months. We also analyze...

Douglas Kim

KOSPI200 Index Rebalance Preview: Hanmi Semiconductor (042700 KS) Flying High

There could be 5 changes for the KOSPI200 Index in June. Hanmi Semiconductor is up 72% over the last 2 months following its potential inclusion in...

Brian Freitas

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