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>Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.</li>
<li>We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.</li>
<li>Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.</li>
</ul>


Value-Up plan announcements had a significant immediate price impact, especially for Woori Financial and Shinhan Financial, amplified by recent dividend tax reductions.
We should target companies likely to announce value-up disclosures soon, focusing on those with prior notices. Notably, KB Financial and DB HiTek have issued prior notices.
Both companies hold many treasury shares. KB Financial is a dividend stock, with value-up disclosures likely during their Q3 and Q4 earnings announcements.


Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

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>The <a href="https://www.smartkarma.com/entities/mirae-asset-tiger-top-10-etf" target="_blank" data-smartkarma-citation="entities:36042:1" rel="noopener">Mirae Asset Tiger Top 10 ETF (292150 KS)</a> tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.</li>
<li>We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.</li>
<li>The trade has performed well historically with positive performance till implementation followed by reversion post implementation.</li>
</ul>


The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.
We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.
The trade has performed well historically with positive performance till implementation followed by reversion post implementation.


FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>After the market close on 14 February, KB Financial announced that The Carlyle Group is trying to sell a 1.2% stake in the company through a block deal sale. </li>
<li>The expected block deal price range is 64,608 won to 65,954 won per share, representing a 2 to 4% discount to the closing price of 67,300 won on 14 February. </li>
<li>We would pass on this block deal sale. Despite excellent gains so far YTD, there is looming risk of many investors that may bail out of KB Financial post ex-dividend.</li>
</ul>


After the market close on 14 February, KB Financial announced that The Carlyle Group is trying to sell a 1.2% stake in the company through a block deal sale. 
The expected block deal price range is 64,608 won to 65,954 won per share, representing a 2 to 4% discount to the closing price of 67,300 won on 14 February. 
We would pass on this block deal sale. Despite excellent gains so far YTD, there is looming risk of many investors that may bail out of KB Financial post ex-dividend.


Carlyle Group Selling More than 320 Billion Won Worth of KB Financial in a Block Deal Sale

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>The <a href="https://www.smartkarma.com/entities/carlyle-group-inc-the" target="_blank" data-smartkarma-citation="entities:33402:1" rel="noopener">Carlyle Group / (CG US)</a> via Kingsman Investment, is looking to raise US$244m from selling its entire stake in <a href="https://www.smartkarma.com/entities/kb-financial-group-inc" target="_blank" data-smartkarma-citation="entities:718:1" rel="noopener">KB Financial (105560 KS)</a>.</li>
<li>Carlyle has been invested in the firm since mid-2020, where it then expressed that it would hold on to its stake for at least three and a half years. </li>
<li>The deal would be a small one to digest at just 3.8 days of KB Financial’s three month ADV, representing 1.2% of its current mcap.</li>
</ul>


The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).
Carlyle has been invested in the firm since mid-2020, where it then expressed that it would hold on to its stake for at least three and a half years. 
The deal would be a small one to digest at just 3.8 days of KB Financial’s three month ADV, representing 1.2% of its current mcap.


KB Financial Placement - Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

Equity Bottom-Up

<ul>
<li>The local media have started to provide some concrete figures of the amount of losses related to HSCEI related ELS products sold by major Korean banks and securities firms.</li>
<li>If HSCEI continues to remain at about 5,450 to the end of March 2024, the total losses could rise to nearly 1.6 trillion won, impacting more than 45,000 investors. </li>
<li>Concerns about HSCEI index related ELS losses have negatively impacted both the major Korean banks and securities companies in Korea in the past 1-2 months. </li>
</ul>


The local media have started to provide some concrete figures of the amount of losses related to HSCEI related ELS products sold by major Korean banks and securities firms.
If HSCEI continues to remain at about 5,450 to the end of March 2024, the total losses could rise to nearly 1.6 trillion won, impacting more than 45,000 investors. 
Concerns about HSCEI index related ELS losses have negatively impacted both the major Korean banks and securities companies in Korea in the past 1-2 months. 


An Update on HSCEI Index Related ELS Losses for Korean Financials + BOK's Pivot in 2024

South Korea

KB Financial Group Inc. (the "Company"), in accordance with Financial Holding Companies Act, was established on September 29, 2008, through stock transfer with the former shareholders of its subsidiaries including Kookmin Bank in order to provide management services and financing to associated companies. The headquarters are located at Seoul, Korea

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KB Financial ADR (KB US)

Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

This post explores the feasibility and key targets of a proactive flow trading setup aimed at Korea's value-up plan disclosures.

Sanghyun Park

FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

There could be two changes for the FnGuide Top 10 Index in June. Historically, the adds have outperformed the deletes pre-implementation and there...

Brian Freitas

Carlyle Group Selling More than 320 Billion Won Worth of KB Financial in a Block Deal Sale

After the market close on 14 February, KB Financial announced that The Carlyle Group is trying to sell a 1.2% stake in the company through a block...

Douglas Kim

KB Financial Placement - Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Examining a Proactive Flow Trading Setup Targeting Korean Value-Up Disclosures

This post explores the feasibility and key targets of a proactive flow trading setup aimed at Korea's value-up plan disclosures.

Sanghyun Park

FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

There could be two changes for the FnGuide Top 10 Index in June. Historically, the adds have outperformed the deletes pre-implementation and there...

Brian Freitas

Carlyle Group Selling More than 320 Billion Won Worth of KB Financial in a Block Deal Sale

After the market close on 14 February, KB Financial announced that The Carlyle Group is trying to sell a 1.2% stake in the company through a block...

Douglas Kim

KB Financial Placement - Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).

Clarence Chu

An Update on HSCEI Index Related ELS Losses for Korean Financials + BOK's Pivot in 2024

If HSCEI continues to remain at about 5,450 to the end of March 2024, the total losses could rise to nearly 1.6 trillion won, impacting more than...

Douglas Kim