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>LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.</li>
<li>Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.</li>
<li>It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.</li>
</ul>


LG Energy's virtually locked-up shares rise to nearly 95%. This should at least partially explain why its price has substantially outperformed the KOSPI in recent months, showing strong downward rigidity.
Additional long-term money equivalent to 2-3% of SO can come in for 5% float shares. There is no precedent for a float crunch of this magnitude among top-cap local stocks.
It seems necessary to reconsider taking a shorting position for LG Energy even after the 9th of next month when the short-term passives inflow situation is completed.


Assessing LG Energy Solution's Flow Imbalance Situation

<ul>
<li>Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.</li>
<li>There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.</li>
<li>There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.</li>
</ul>


Despite the WATCH list's confusion, LG Energy Solution replaced LG Chem. In addition, Solactive excluded Iljin Materials, evidently due to its float-adjusted market cap size.
There are some somewhat elusive additions. The most prominent example is Japan Steel Works, which replaced LG Chem in the updated WATCH list at the last minute.
There was confusion about LG Chem's deletion until the last minute, so, likely, the market has not sufficiently reflected this rebalancing factor in LG Energy/LG Chem's LONG/SHORT.


Solactive Lithium Review Results Out: Key Takeaways

<ul>
<li>LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.</li>
<li>Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.</li>
<li>SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.</li>
</ul>


LG Chem's deletion is almost a done deal. The pouch-type pack goes to LG Energy, and the cathode business is not big enough to beat L&amp;F.
Chunbo is an additive field that this index has not included so far. So, Chunbo will be added as a new addition rather than replacing someone else.
SK IE Tech is quite tricky. The key is to see separator and elecfoil as the same field. If so, SK IET is likely to replace Iljin Materials.


Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

High Quality Stock Setups, Weekly Stock Bull Finder

Weekly Stock Bull Finder

High Quality Stock Setups

Finding high potential stock setups on quality companies

Thematic (Sector/Industry)

<ul><li>The last month and a half has featured a significant character change in all things clean energy whose timing came alongside the announcement of the US government’s largest fiscal spending package for renewable energy investment. </li><li>We are now potentially witnessing the first “follow through” effect of the Russia/Ukraine conflict which is that nations are waking up to the fact that energy security and infrastructure must be given a much higher priority and investment must be made to grow sources of supply in order to have stable and lasting economic growth. </li><li>This secular trend is still in its very early innings from an investment standpoint.</li></ul>

The last month and a half has featured a significant character change in all things clean energy whose timing came alongside the announcement of the US government’s largest fiscal spending package for renewable energy investment. We are now potentially witnessing the first “follow through” effect of the Russia/Ukraine conflict which is that nations are waking up to the fact that energy security and infrastructure must be given a much higher priority and investment must be made to grow sources of supply in order to have stable and lasting economic growth. This secular trend is still in its very early innings from an investment standpoint.

<ul>
<li>Solactive Global X Lithium (LIT) made an ordinary rebalancing announcement. LG Energy fails to join the Index this time. The inclusion seems to have been pushed back to October.</li>
<li>
LG Energy's short-term flow is likely to receive downward pressure from the 3M IPO lockups to be released today as it cannot expect additional passive inflows in the short term.</li>
<li>These are 1.87M shares (3.7x ADTV). As the share price is still up more than 40% from the IPO price, their profit realization incentives are expected to be quite strong.</li>
</ul>


Solactive Global X Lithium (LIT) made an ordinary rebalancing announcement. LG Energy fails to join the Index this time. The inclusion seems to have been pushed back to October.

LG Energy's short-term flow is likely to receive downward pressure from the 3M IPO lockups to be released today as it cannot expect additional passive inflows in the short term.
These are 1.87M shares (3.7x ADTV). As the share price is still up more than 40% from the IPO price, their profit realization incentives are expected to be quite strong.


LG Energy Fails Inclusion in LIT's April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today

United States

Global X Lithium & Battery Tech ETF is an exchange-traded fund incorporated in the USA. The Fund seeks investment results that correspond to the price and yield performance of the Solactive Global Lithium Index.

Global X Lithium & Battery Tech ETF (LIT US)

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Global X Lithium & Battery Tech ETF (LIT US)

Assessing LG Energy Solution's Flow Imbalance Situation

This post assesses LG Energy Solution's flow imbalance situation, which seems to lead to pricing independent of fundamentals.

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Solactive Lithium Review Results Out: Key Takeaways

This post details the review results of the Solactive Global Lithium Index and discusses key takeaways for trading setups.

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Solactive Lithium Index Rebalancing: Noteworthy Names in Korea Before the Announcement

This post discusses the notable Korean stocks in the upcoming rebalancing of the Solactive Lithium Index (Global X ETF: LIT).

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Weekly Stock Bullfinder - Week of 8/15

Solar names in particular continue to be on fire but may need some time to cool off and let the moving averages catch up.

Weekly Stock Bull Finder

LG Energy Fails Inclusion in LIT's April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today

LG Energy fails inclusion in Solactive Global X Lithium Index's April rebalancing and faces the 3M IPO lockup release (3.7x ADTV) today.

Sanghyun Park

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