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

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>The new rule mandates that retail pool fees be tied to the fees paid by institutional borrowers, and this information must be publicly disclosed.</li>
<li>This rule ensures faster, more accurate market release of stock-specific borrow fees, which are now tied to actual fees received, replacing the arbitrarily set rates by brokerages.</li>
<li>With short-selling resuming next April, this rule could drive new flow trading strategies and significantly influence target screening in the short-selling market.</li>
</ul>


The new rule mandates that retail pool fees be tied to the fees paid by institutional borrowers, and this information must be publicly disclosed.
This rule ensures faster, more accurate market release of stock-specific borrow fees, which are now tied to actual fees received, replacing the arbitrarily set rates by brokerages.
With short-selling resuming next April, this rule could drive new flow trading strategies and significantly influence target screening in the short-selling market.


Korea's New Retail Pool Borrow Fee Calculation & Disclosure Rules: Impacts on Flow Trading

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

<ul>
<li>After a large sell-off, similar to other major global markets, 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> last week rebounded and closed strongly up. In this insight we want to evaluate what's next.</li>
<li>According to our pattern models, at the moment the index is not overbought yet, so in theory the index could rise higher, this week.</li>
<li>Pay attention when the index reaches the <strong>385 price area</strong>, from there the index could start to encounter some <strong>resistance</strong>.</li>
</ul>


After a large sell-off, similar to other major global markets, the KOSPI 200 INDEX last week rebounded and closed strongly up. In this insight we want to evaluate what's next.
According to our pattern models, at the moment the index is not overbought yet, so in theory the index could rise higher, this week.
Pay attention when the index reaches the 385 price area, from there the index could start to encounter some resistance.


EQD | KOSPI 200 Rising With Room to Go Higher (This Week Only)

<ul>
<li>This final guideline formalizes earlier drafts by the FSS. Though not strictly mandatory, its detailed requirements mean it functions as a de facto rule that must be followed closely.</li>
<li>The new, stringent requirements are likely to eliminate common stock borrowing practices in Korea, making timely transactions difficult.</li>
<li>New trading patterns and market flows may emerge when short selling resumes in April, with increased importance of borrow balance data and potential rise in counter-flow trading.</li>
</ul>


This final guideline formalizes earlier drafts by the FSS. Though not strictly mandatory, its detailed requirements mean it functions as a de facto rule that must be followed closely.
The new, stringent requirements are likely to eliminate common stock borrowing practices in Korea, making timely transactions difficult.
New trading patterns and market flows may emerge when short selling resumes in April, with increased importance of borrow balance data and potential rise in counter-flow trading.


Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications

<ul>
<li>Nine companies disclosed value-up plans, with four official and five pending disclosures. Initially, these announcements boosted stock prices, but long-term correlations were inconclusive. Yet, shareholder returns notably rose in H1.</li>
<li>NPS increased stakes in three of the nine recently announced value-up companies. They share traits in value-up trading (large caps &amp; low PBR), potentially guiding our strategy as NPS enters.</li>
<li>BlackRock's Hong Kong branch has recently engaged with six Korean asset management firms for potential entrustment of its Asian fund's Korean investment portion, focusing on the value-up policy.</li>
</ul>


Nine companies disclosed value-up plans, with four official and five pending disclosures. Initially, these announcements boosted stock prices, but long-term correlations were inconclusive. Yet, shareholder returns notably rose in H1.
NPS increased stakes in three of the nine recently announced value-up companies. They share traits in value-up trading (large caps &amp; low PBR), potentially guiding our strategy as NPS enters.
BlackRock's Hong Kong branch has recently engaged with six Korean asset management firms for potential entrustment of its Asian fund's Korean investment portion, focusing on the value-up policy.


Recently Observed Market Flow Movements Related to Korea's Value-Up Initiatives

<ul>
<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> started a modest pullback and is entering a BUY area, but it could fall further this coming week, caution is advised.</li>
<li>The support levels to buy are between 383-371, this coming week.</li>
<li>Alternatively buy the Close, if the WEEKLY Close is negative, next Friday.</li>
</ul>


The KOSPI 200 INDEX started a modest pullback and is entering a BUY area, but it could fall further this coming week, caution is advised.
The support levels to buy are between 383-371, this coming week.
Alternatively buy the Close, if the WEEKLY Close is negative, next Friday.


EQD | KOSPI 200 Sell-Off Could Accelerate This Week, But It's A BUY

South Korea

The KOSPI 200 Index is a capitalization-weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index was developed with a base value of 100 as of January 3, 1990.

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

Korea's New Retail Pool Borrow Fee Calculation & Disclosure Rules: Impacts on Flow Trading

This post outlines the Korean Financial Supervisory Service's newly released rules on calculating and disclosing retail pool borrow fees and...

Sanghyun Park

EQD | KOSPI 200 Rising With Room to Go Higher (This Week Only)

The KOSPI 200 INDEX rebounded after the latest global sell-off, it could rise higher this week but watch for resistance at 385-390 price area.

Nico Rosti

Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications

This morning, the Korea FSS released the final version of its short selling compliance guidelines. This post explores the guidelines and their...

Sanghyun Park

EQD | KOSPI 200 Sell-Off Could Accelerate This Week, But It's A BUY

The KOSPI 200 Index performed a modest pullback last week, entering the BUY area but caution is advised as further pullback is possible this...

Nico Rosti

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Korea's New Retail Pool Borrow Fee Calculation & Disclosure Rules: Impacts on Flow Trading

This post outlines the Korean Financial Supervisory Service's newly released rules on calculating and disclosing retail pool borrow fees and...

Sanghyun Park

EQD | KOSPI 200 Rising With Room to Go Higher (This Week Only)

​The KOSPI 200 INDEX rebounded after the latest global sell-off, it could rise higher this week but watch for resistance at 385-390 price area.

Nico Rosti

Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications

This morning, the Korea FSS released the final version of its short selling compliance guidelines. This post explores the guidelines and their...

Sanghyun Park

Recently Observed Market Flow Movements Related to Korea's Value-Up Initiatives

Value-up remains pivotal in the Korean market's second half for market flow. This post investigates the recently observed movements related to the...

Sanghyun Park

EQD | KOSPI 200 Sell-Off Could Accelerate This Week, But It's A BUY

​The KOSPI 200 Index performed a modest pullback last week, entering the BUY area but caution is advised as further pullback is possible this...

Nico Rosti

The KOSPI 200 INDEX rebounded after the latest global sell-off, it could rise higher this week but watch for resistance at 385-390 price area.

The KOSPI 200 Index performed a modest pullback last week, entering the BUY area but caution is advised as further pullback is possible this...