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.

Index Rebalance

<ul>
<li>KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.</li>
<li>This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.</li>
<li>Even after Thursday's rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.</li>
</ul>


KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.
This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.
Even after Thursday's rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.


KRX Value-Up Index Rebalance Results and Estimated Passive Impact

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Hyundai Mobis (012330 KS) is a strong turnaround story and it has sharply outperformed KOSPI and other major Hyundai Motor Group stocks in the past three months.</li>
<li>In this insight, we discuss three major reasons why are remain positive on Hyundai Mobis. </li>
<li>The combined value of Hyundai Mobis' 21.9% stake in Hyundai Motor and stakes in other companies is worth 16.7 trillion won, which represents 73% of Hyundai Mobis' current market cap. </li>
</ul>


Hyundai Mobis (012330 KS) is a strong turnaround story and it has sharply outperformed KOSPI and other major Hyundai Motor Group stocks in the past three months.
In this insight, we discuss three major reasons why are remain positive on Hyundai Mobis. 
The combined value of Hyundai Mobis' 21.9% stake in Hyundai Motor and stakes in other companies is worth 16.7 trillion won, which represents 73% of Hyundai Mobis' current market cap. 


Hyundai Mobis: A Turnaround Story With Strong Outperformance in the Past Three Months

<ul>
<li>In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.</li>
<li>Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.</li>
<li>These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).</li>
</ul>


In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).


Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

Event-Driven

<ul>
<li>Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.</li>
<li>Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis's stock low, but Chung Mong-koo’s health complicates timing and strategy.</li>
<li>Mobis's trading point depends on Chung Mong-koo's health. Three scenarios: he's healthy, critically ill, or deceased. Current rumors' price impacts are unlikely to subside soon.</li>
</ul>


Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.
Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis's stock low, but Chung Mong-koo’s health complicates timing and strategy.
Mobis's trading point depends on Chung Mong-koo's health. Three scenarios: he's healthy, critically ill, or deceased. Current rumors' price impacts are unlikely to subside soon.


The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group

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>Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.</li>
<li>Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.</li>
<li>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> has outperformed 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>, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.</li>
</ul>


Short selling in Korea resumes in a couple of hours. Expect heightened volatility for a few days before things settle down.
Foreign investors have increased their holdings over the last five weeks and there could be further buying in select stocks on stock price drops.
The KOSPI 200 INDEX has outperformed the KOSDAQ 150 Index, and the forecast index deletes have underperformed the indices indicating that there will be positioning for the short-sell resumption.


South Korea

Hyundai Mobis Co., Ltd. manufactures and markets automotive parts and equipment, such as  automotive service components, modules, and systems. The Company also contractsenvironmental projects, including sewage treatment plant and industrial waste water treatment plant construction.

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Hyundai Mobis (012330 KS)

KRX Value-Up Index Rebalance Results and Estimated Passive Impact

This post breaks down the latest special rebalancing results for the KRX Value-Up Index, along with the estimated passive impact.

Sanghyun Park

Hyundai Mobis: A Turnaround Story With Strong Outperformance in the Past Three Months

Hyundai Mobis (012330 KS) is a strong turnaround story and it has sharply outperformed KOSPI and other major Hyundai Motor Group stocks in the past...

Douglas Kim

Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2024

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in...

Douglas Kim

The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group

This post offers the latest update on market rumors concerning the passing of Chung Mong-koo, chairman of Hyundai Motor Group.

Sanghyun Park

Korea Short Selling: Off to the Races

Data indicates positioning in different types of trades ranging from index pairs to forecast index deletions and stocks with high forward PEs. Some...

Brian Freitas

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