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

Event-Driven

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. </li>
<li>Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.</li>
<li>There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.</li>
</ul>


Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. 
Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.


Korea: Short Selling Is Back in March; Trade Ideas

<ul>
<li>Eight months after shareholders approved the transfer from the KOSDAQ to the KOSPI market, <a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM (247540 KS)</a> has submitted the application for section transfer to the KRX.</li>
<li>Given historical precedent, the transfer could take place in February. <a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM</a>'s deletion will mean an inclusion to the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ150 Index</a> to maintain the number of index constituents at 150.</li>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-bm-co-ltd" target="_blank" data-smartkarma-citation="entities:27873:1" rel="noopener">Ecopro BM (247540 KS)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index</a> leading to passive selling and some short covering. Then will come the inclusion to 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 Index</a>.</li>
</ul>


Eight months after shareholders approved the transfer from the KOSDAQ to the KOSPI market, Ecopro BM (247540 KS) has submitted the application for section transfer to the KRX.
Given historical precedent, the transfer could take place in February. Ecopro BM's deletion will mean an inclusion to the KOSDAQ150 Index to maintain the number of index constituents at 150.

Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index leading to passive selling and some short covering. Then will come the inclusion to the KOSPI 200 Index.


Ecopro BM (247540 KS): Index Implications as KOSPI Transfer Nears

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI. </li>
<li>Ecopro BM is currently the second largest company in KOSDAQ. At the current market cap, Ecopro BM will be the 34th largest company in KOSPI (in terms of market cap).</li>
<li>Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM which is trading at P/E of 134x and P/B of 9.4x in 2026.</li>
</ul>


On 27 November, Ecopro BM (247540 KS) announced that it has filed an application for the transfer of listing from KOSDAQ to KOSPI. 
Ecopro BM is currently the second largest company in KOSDAQ. At the current market cap, Ecopro BM will be the 34th largest company in KOSPI (in terms of market cap).
Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM which is trading at P/E of 134x and P/B of 9.4x in 2026.


Ecopro BM: Transfer of Listing from KOSDAQ to KOSPI Is Likely in 1Q 2025

Index Rebalance

<ul>
<li>Solactive has announced the constituent changes for the Global Lithium Index. There are 3 adds and 3 deletes with implementation at the close on 31 October.</li>
<li>Estimated one-way turnover is 13.8% and will result in a one-way trade of US$174m. There are a few stocks with over 1x ADV to trade.</li>
<li>The index is not very widely tracked and there could be big moves in some stocks over the next few days - especially where there is multiple days ADV.</li>
</ul>


Solactive has announced the constituent changes for the Global Lithium Index. There are 3 adds and 3 deletes with implementation at the close on 31 October.
Estimated one-way turnover is 13.8% and will result in a one-way trade of US$174m. There are a few stocks with over 1x ADV to trade.
The index is not very widely tracked and there could be big moves in some stocks over the next few days - especially where there is multiple days ADV.


Solactive Global Lithium Index Rebalance: 28% Turnover & US$350m Trade

Equity Capital Markets

EcoPro Materials / Equity Capital Markets

<ul>
<li>EcoPro Materials announced a capital raise worth 389 billion won. The company plans to issue 5.12 million new shares, representing 7.3% of its current outstanding shares (69.74 million).</li>
<li>This capital raise is in the form of redeemable convertible preferred shares (RCPS). Conversion price of this RCPS is 75,974 won which is 9.9% higher than current price. </li>
<li>Ecopro Materials' share price is down 27% from 27 February 2025. We continue to remain negative on Ecopro Materials. </li>
</ul>


EcoPro Materials announced a capital raise worth 389 billion won. The company plans to issue 5.12 million new shares, representing 7.3% of its current outstanding shares (69.74 million).
This capital raise is in the form of redeemable convertible preferred shares (RCPS). Conversion price of this RCPS is 75,974 won which is 9.9% higher than current price. 
Ecopro Materials' share price is down 27% from 27 February 2025. We continue to remain negative on Ecopro Materials. 


Ecopro Materials: Announces A Capital Raise Worth 389 Billion Won

South Korea

Ecopro BM Co.,Ltd develops and manufactures advanced materials. The Company produces and sells high-nickel cathode materials and other products. Ecopro BM markets its products throughout Korea.

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Ecopro BM (247540 KS)

Korea: Short Selling Is Back in March; Trade Ideas

Short selling in Korea commences from Monday. There will be a lot of interest in shorting stocks/sectors depending on how they have performed since...

Brian Freitas