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 value-up index aims to align closely with the KOSPI 200's composition, adjusting stock weights based on factors from KRX Governance Leaders 100 and KRX ESG Dividend Opportunities Index.</li>
<li>Insiders confirm NPS will create new funds to track the value-up index, needing SAA adjustments and Fund Management Committee approval. Despite hurdles, government backing suggests smooth NPS involvement.</li>
<li>Buybacks could cause passive outflows in KOSPI 200 rebalancing and inflows in value-up index rebalancing. This timing discrepancy could create a consistent passive flow pattern for these stocks.</li>
</ul>


The value-up index aims to align closely with the KOSPI 200's composition, adjusting stock weights based on factors from KRX Governance Leaders 100 and KRX ESG Dividend Opportunities Index.
Insiders confirm NPS will create new funds to track the value-up index, needing SAA adjustments and Fund Management Committee approval. Despite hurdles, government backing suggests smooth NPS involvement.
Buybacks could cause passive outflows in KOSPI 200 rebalancing and inflows in value-up index rebalancing. This timing discrepancy could create a consistent passive flow pattern for these stocks.


Latest Info on Value-Up Index Involving KRX & NPS: Potential Flow Trading Patterns

<ul>
<li>Lee urgently appeard on TV today and said, "In June, we will explain whether and when short selling will be resumed, and what criteria we might use for the resumption."</li>
<li>He noted considering flexible partial short selling resumption even if only some conditions are met, contrasting the Presidential Office's stance from two days ago.</li>
<li>Presidential Office led short selling ban, now likely under FSC/FSS jurisdiction for resumption.</li>
</ul>


Lee urgently appeard on TV today and said, "In June, we will explain whether and when short selling will be resumed, and what criteria we might use for the resumption."
He noted considering flexible partial short selling resumption even if only some conditions are met, contrasting the Presidential Office's stance from two days ago.
Presidential Office led short selling ban, now likely under FSC/FSS jurisdiction for resumption.


FSS Head Lee Made an Urgent TV Appearance Today to Discuss the Resumption of Short Selling

Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

<ul>
<li>This is an update to our previous insight published on April 22nd: "<a href="https://www.smartkarma.com/insights/eqd-kospi-200-weekly-bounce-rally-or-not" target="_blank" rel="noopener">EQD | KOSPI 200 WEEKLY Bounce: Rally or Not?</a>".</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 performed a nearly +6% rally in the last 3 weeks, closing up 3 weeks in a row (CC=+3).</li>
<li>We have something to say about this pattern that was identified 3 weeks and ago and so we wanted to post this insight to explicit our view.</li>
</ul>


This is an update to our previous insight published on April 22nd: "EQD | KOSPI 200 WEEKLY Bounce: Rally or Not?".
The KOSPI 200 INDEX  has performed a nearly +6% rally in the last 3 weeks, closing up 3 weeks in a row (CC=+3).
We have something to say about this pattern that was identified 3 weeks and ago and so we wanted to post this insight to explicit our view.


<ul>
<li>Nextrade aims to secure the business permit within the next year's second half. They intend to launch their services by the end of next year or early the following year.</li>
<li>All eyes are focused on the proposal to be operational from 8:30 AM to 11:59 PM, with the afternoon call auction session running from 3:00 PM to 6:00 PM.</li>
<li>It would be crucial to observe how the elongation of the time period for specific issues to be reflected in prices could potentially lead to changes in intraday flow patterns.</li>
</ul>


Nextrade aims to secure the business permit within the next year's second half. They intend to launch their services by the end of next year or early the following year.
All eyes are focused on the proposal to be operational from 8:30 AM to 11:59 PM, with the afternoon call auction session running from 3:00 PM to 6:00 PM.
It would be crucial to observe how the elongation of the time period for specific issues to be reflected in prices could potentially lead to changes in intraday flow patterns.


Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns

<ul>
<li>There is a prevailing sentiment in the local market that short selling by market makers (MM) and liquidity providers (LP) will effectively be prohibited very shortly.</li>
<li>The widening of the futures basis extends the influence of futures on the spot market prices. This is precisely where trading opportunities that we should be keenly observing may arise.</li>
<li>It also leads to a significant widening of ETF tracking errors due to the direct sell-off of underlying shares. We must capitalize on extreme spreads in ETFs.</li>
</ul>


There is a prevailing sentiment in the local market that short selling by market makers (MM) and liquidity providers (LP) will effectively be prohibited very shortly.
The widening of the futures basis extends the influence of futures on the spot market prices. This is precisely where trading opportunities that we should be keenly observing may arise.
It also leads to a significant widening of ETF tracking errors due to the direct sell-off of underlying shares. We must capitalize on extreme spreads in ETFs.


New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban

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)

Latest Info on Value-Up Index Involving KRX & NPS: Potential Flow Trading Patterns

This post gathers the latest info on the value-up index involving Korea Exchange and National Pension Service and investigates potential flow...

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FSS Head Lee Made an Urgent TV Appearance Today to Discuss the Resumption of Short Selling

This post highlights Korea FSS Head Lee Bok-hyun's televised remarks today on short-selling resumption and examines their implications

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EQD | KOSPI 200 Ready to Pullback

The KOSPI 200 Index has performed a nearly +6% rally in 3 weeks, but overall the uptrend looks weak. Our models say the index should correct this...

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Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns

The Financial Services Commission and the Financial Supervisory Service announced that they will launch the Alternative Trading System (ATS) called...

Sanghyun Park

New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban

This post explores the immediate market impact resulting from the potential prohibition of short selling by Market Makers (MM) and Liquidity...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)