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

GS Engineering & Construction / Event-Driven

<ul>
<li>Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering &amp; Construction newly made the list.</li>
<li>Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.</li>
<li>The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.</li>
</ul>


Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering &amp; Construction newly made the list.
Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.
The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.


KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

<ul>
<li>We generally detect an increase in the buying volume of local institutions for stocks moving from Large Cap to Mid Cap ahead of the KOSPI size index rebalancing.</li>
<li>At the last close, Mid→Large: Pan Ocean, Hyundai Mipo, BGF Retail, &amp; OCI / Large→Mid: Hanmi Science, KCC, DB Hitek, &amp; KEPCO E&amp;C
</li>
<li>The level of price impact/correlation in the last rebalancing was exceptionally high. This is reason enough for us to consider setting up a preemptive position for this rebalancing event.</li>
</ul>


We generally detect an increase in the buying volume of local institutions for stocks moving from Large Cap to Mid Cap ahead of the KOSPI size index rebalancing.
At the last close, Mid→Large: Pan Ocean, Hyundai Mipo, BGF Retail, &amp; OCI / Large→Mid: Hanmi Science, KCC, DB Hitek, &amp; KEPCO E&amp;C

The level of price impact/correlation in the last rebalancing was exceptionally high. This is reason enough for us to consider setting up a preemptive position for this rebalancing event.


KOSPI Size Index Series: September Rebalancing Preview

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Korea Investment Management will be launching a new nuclear power related ETF called Kindex Nuclear Theme Deep Search ETF on 28 June. </li>
<li>NH-Amundi Asset Management will also be launching Hanaro Nuclear iSelect ETF on 28 June. Both ETFs are the first ones to focus on the nuclear power related stocks in Korea.</li>
<li>The launch of these ETFs should have a positive impact on the major nuclear power related stocks including Doosan Enerbility (034020 KS) and Kepco Plant Service &amp; Engineering (051600 KS).</li>
</ul>


Korea Investment Management will be launching a new nuclear power related ETF called Kindex Nuclear Theme Deep Search ETF on 28 June. 
NH-Amundi Asset Management will also be launching Hanaro Nuclear iSelect ETF on 28 June. Both ETFs are the first ones to focus on the nuclear power related stocks in Korea.
The launch of these ETFs should have a positive impact on the major nuclear power related stocks including Doosan Enerbility (034020 KS) and Kepco Plant Service &amp; Engineering (051600 KS).


Launch of Kindex Nuclear Theme Deep Search ETF & Hanaro Nuclear ISelect ETF in Korea

Kepco Engineering & Construction / Event-Driven

<ul>
<li>Since KEPCO announced the sale of its stake in KEPCO E&amp;C, this will happen. But the question is when, and the market was betting that it would not happen immediately.</li>
<li>But these bets collapsed yesterday. It is because Choo Kyung-ho, Deputy Prime Minister of Economy, publicly made remarks yesterday that seemed to pressure KEPCO to make additional self-rescue efforts.</li>
<li>KEPCO may aim at the level of ₩60,000 by applying a 5-7% discount rate from the mid-₩60,000 price. With this price in mind, we need to time this block deal.</li>
</ul>


Since KEPCO announced the sale of its stake in KEPCO E&amp;C, this will happen. But the question is when, and the market was betting that it would not happen immediately.
But these bets collapsed yesterday. It is because Choo Kyung-ho, Deputy Prime Minister of Economy, publicly made remarks yesterday that seemed to pressure KEPCO to make additional self-rescue efforts.
KEPCO may aim at the level of ₩60,000 by applying a 5-7% discount rate from the mid-₩60,000 price. With this price in mind, we need to time this block deal.


Discussing How We Should Time the KEPCO E&C Block Deal

<ul>
<li>There has been increased speculation about a potential block deal sale of Kepco Engineering &amp; Construction (052690 KS), driving its share price lower in the past several days.</li>
<li>KEPCO owns a 65.77% stake in Kepco Engineering &amp; Construction (052690 KS). </li>
<li>We believe that there could be a further 10-20% downside risk for KEPCO E&amp;C in the coming weeks.</li>
</ul>


There has been increased speculation about a potential block deal sale of Kepco Engineering &amp; Construction (052690 KS), driving its share price lower in the past several days.
KEPCO owns a 65.77% stake in Kepco Engineering &amp; Construction (052690 KS). 
We believe that there could be a further 10-20% downside risk for KEPCO E&amp;C in the coming weeks.


Block Deal Sale of KEPCO Engineering & Construction Likely in 2H 2022

South Korea

KEPCO Engineering & Construction Company, Inc. designs nuclear and conventionally-fueled electricity generating plants.  The Company also provides power plant engineering services and consulting services to power industry.

Kepco Engineering & Construction (052690 KS)

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Kepco Engineering & Construction (052690 KS)

KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

This post filters eight strong targets for long/short basket trading ahead of the September KOSPI Size Index Series rebalancing.

Sanghyun Park

KOSPI Size Index Series: September Rebalancing Preview

This post previews the upcoming rebalancing event of the KOSPI Size Index Series. Mid→Large: Pan Ocean, Hyundai Mipo, BGF Retail, & OCI /...

Sanghyun Park

Launch of Kindex Nuclear Theme Deep Search ETF & Hanaro Nuclear ISelect ETF in Korea

The launch of the new nuclear power related ETFs should have a positive impact on the major nuclear power related stocks including Doosan...

Douglas Kim

Discussing How We Should Time the KEPCO E&C Block Deal

This post gives the background story surrounding the KEPCO E&C block deal and discusses how we should time this stake sale event.

Sanghyun Park

Block Deal Sale of KEPCO Engineering & Construction Likely in 2H 2022

There has been increased speculation about a potential block deal sale of Kepco Engineering & Construction (052690 KS), driving its share price...

Douglas Kim

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