Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The review period for the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> June rebalance ends on 30 April. The Korea Exchange (KRX) will announce the results of the June 2021 review of the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> in May with the changes becoming effective after the close of trading on 10 June.</p><p>We currently see 15 inclusions and 15 exclusions from the index.</p><p>The potential inclusions are Vaxcell Bio Therapeutics (323990 KS), <a href="https://www.smartkarma.com/entities/gemvax-kael-co-ltd" target="_blank" data-smartkarma-citation="entities:17026:1" rel="noopener">Gemvax &amp; Kael (082270 KS)</a>, <a href="https://www.smartkarma.com/entities/binex-co-ltd" target="_blank" data-smartkarma-citation="entities:1949:1" rel="noopener">Binex Co Ltd (053030 KS)</a>, <a href="https://www.smartkarma.com/entities/nanos-co-ltd" target="_blank" data-smartkarma-citation="entities:16796:1" rel="noopener">Nanos Co Ltd (151910 KS)</a>, <a href="https://www.smartkarma.com/entities/tesna-inc" target="_blank" data-smartkarma-citation="entities:8792:1" rel="noopener">Tesna Inc (131970 KS)</a>, <a href="https://www.smartkarma.com/entities/simmtech-co-ltd" target="_blank" data-smartkarma-citation="entities:28871:1" rel="noopener">SIMMTECH Co Ltd (222800 KS)</a>, Park Systems Corp (140860 KS), <a href="https://www.smartkarma.com/entities/sam-kang-m-t-co-ltd" target="_blank" data-smartkarma-citation="entities:7263:1" rel="noopener">Sam Kang M&amp;T (100090 KS)</a>, <a href="https://www.smartkarma.com/entities/hana-materials-inc" target="_blank" data-smartkarma-citation="entities:24088:1" rel="noopener">Hana Materials Inc (166090 KS)</a>, <a href="https://www.smartkarma.com/entities/tse-co-ltd" target="_blank" data-smartkarma-citation="entities:17821:1" rel="noopener">Tse Co Ltd (131290 KS)</a>, <a href="https://www.smartkarma.com/entities/unison-co-ltd-south-korea" target="_blank" data-smartkarma-citation="entities:18617:1" rel="noopener">Unison Co Ltd (018000 KS)</a>, AJu IB Investment (027360 KS), <a href="https://www.smartkarma.com/entities/woori-technology-inv-co-ltd" target="_blank" data-smartkarma-citation="entities:2853:1" rel="noopener">Woori Technology Inv (041190 KS)</a>, <a href="https://www.smartkarma.com/entities/icure-pharm-inc" target="_blank" data-smartkarma-citation="entities:27142:1" rel="noopener">Icure Pharm Inc (175250 KS)</a> and <a href="https://www.smartkarma.com/entities/sungwoo-hitech-co-ltd" target="_blank" data-smartkarma-citation="entities:3963:1" rel="noopener">Sungwoo Hitech (015750 KS)</a>. </p><p>The potential exclusions are <a href="https://www.smartkarma.com/entities/hlscience-co-ltd" target="_blank" data-smartkarma-citation="entities:23629:1" rel="noopener">HLscience Co. (239610 KS)</a>, <a href="https://www.smartkarma.com/entities/easy-bio-inc" target="_blank" data-smartkarma-citation="entities:5778:1" rel="noopener">Easy Bio Inc (035810 KS)</a>, <a href="https://www.smartkarma.com/entities/vt-gmp-co-ltd" target="_blank" data-smartkarma-citation="entities:8056:1" rel="noopener">VT GMP Co Ltd (018290 KS)</a>, <a href="https://www.smartkarma.com/entities/stcube" target="_blank" data-smartkarma-citation="entities:4872:1" rel="noopener">STCube (052020 KS)</a>, <a href="https://www.smartkarma.com/entities/iriver-ltd" target="_blank" data-smartkarma-citation="entities:13005:1" rel="noopener">Iriver Ltd (060570 KS)</a>, <a href="https://www.smartkarma.com/entities/shinheung-sec" target="_blank" data-smartkarma-citation="entities:24426:1" rel="noopener">Shin Heung Energy &amp; Electronics Co (243840 KS)</a>, <a href="https://www.smartkarma.com/entities/saraminhr-co-ltd" target="_blank" data-smartkarma-citation="entities:8494:1" rel="noopener">SaraminHR (143240 KS)</a>, <a href="https://www.smartkarma.com/entities/vitzrocell-co-ltd" target="_blank" data-smartkarma-citation="entities:4885:1" rel="noopener">Vitzrocell (082920 KS)</a>, <a href="https://www.smartkarma.com/entities/sangsangin-co-ltd" target="_blank" data-smartkarma-citation="entities:10494:1" rel="noopener">Sangsangin Co., Ltd. (038540 KS)</a>, <a href="https://www.smartkarma.com/entities/advanced-process-systems-corporation" target="_blank" data-smartkarma-citation="entities:24087:1" rel="noopener">Advanced Process Systems (265520 KS)</a>, <a href="https://www.smartkarma.com/entities/ebest-investment-securitie" target="_blank" data-smartkarma-citation="entities:18895:1" rel="noopener">Ebest Investment &amp; Securitie (078020 KS)</a>, <a href="https://www.smartkarma.com/entities/spigen-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:9852:1" rel="noopener">Spigen Korea (192440 KS)</a>, <a href="https://www.smartkarma.com/entities/daea-ti-co-ltd" target="_blank" data-smartkarma-citation="entities:1473:1" rel="noopener">Daea Ti Co Ltd (045390 KS)</a>, <a href="https://www.smartkarma.com/entities/korea-ratings-corp" target="_blank" data-smartkarma-citation="entities:20020:1" rel="noopener">Korea Ratings (034950 KS)</a> and <a href="https://www.smartkarma.com/entities/caregen-co-ltd" target="_blank" data-smartkarma-citation="entities:27337:1" rel="noopener">Caregen Co Ltd (214370 KS)</a>.</p><p>Limited short selling in Korea resumes on 3 May. The expected deletions could drop ahead of the announcement of the changes since <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents are short sell eligible. The stocks that are included in the index could outperform the deletions, but drop off post their inclusion in the <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a>. </p>

The review period for the KOSDAQ 150 Index (KOSDQ150 INDEX) June rebalance ends on 30 April. The Korea Exchange (KRX) will announce the results of the June 2021 review of the KOSDAQ 150 Index (KOSDQ150 INDEX) in May with the changes becoming effective after the close of trading on 10 June.We currently see 15 inclusions and 15 exclusions from the index.The potential inclusions are Vaxcell Bio Therapeutics (323990 KS), Gemvax &amp; Kael (082270 KS), Binex Co Ltd (053030 KS), Nanos Co Ltd (151910 KS), Tesna Inc (131970 KS), SIMMTECH Co Ltd (222800 KS), Park Systems Corp (140860 KS), Sam Kang M&amp;T (100090 KS), Hana Materials Inc (166090 KS), Tse Co Ltd (131290 KS), Unison Co Ltd (018000 KS), AJu IB Investment (027360 KS), Woori Technology Inv (041190 KS), Icure Pharm Inc (175250 KS) and Sungwoo Hitech (015750 KS). The potential exclusions are HLscience Co. (239610 KS), Easy Bio Inc (035810 KS), VT GMP Co Ltd (018290 KS), STCube (052020 KS), Iriver Ltd (060570 KS), Shin Heung Energy &amp; Electronics Co (243840 KS), SaraminHR (143240 KS), Vitzrocell (082920 KS), Sangsangin Co., Ltd. (038540 KS), Advanced Process Systems (265520 KS), Ebest Investment &amp; Securitie (078020 KS), Spigen Korea (192440 KS), Daea Ti Co Ltd (045390 KS), Korea Ratings (034950 KS) and Caregen Co Ltd (214370 KS).Limited short selling in Korea resumes on 3 May. The expected deletions could drop ahead of the announcement of the changes since KOSDAQ 150 Index (KOSDQ150 INDEX) constituents are short sell eligible. The stocks that are included in the index could outperform the deletions, but drop off post their inclusion in the KOSDAQ 150 Index (KOSDQ150 INDEX). 

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes; Big Impact on Deletions

<p>It seems to be spin-off season in Korea.</p><p>Three <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituents will be suspended from trading from 29 April - <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>, <a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> due to a spin-off of its businesses.</p><p><a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> will resume trading on 21 May, <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> will resume trading on 27 May, and <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> will resume trading on 28 May.</p><p><a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> will remain in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> and its spinoff will be added to the index, <a href="https://www.smartkarma.com/entities/f-f-co-ltd" target="_blank" data-smartkarma-citation="entities:15983:1" rel="noopener">F&amp;F Co Ltd (007700 KS)</a> will remain in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> but the spinoff will not be added to the index, <a href="https://www.smartkarma.com/entities/ecopro-co-ltd" target="_blank" data-smartkarma-citation="entities:19029:1" rel="noopener">Ecopro Co Ltd (086520 KS)</a> will continue to be a <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150 Index (KOSDQ150 INDEX)</a> constituent though its spinoff will not be included in the index.</p><p>In this Insight, we look at the index treatment, the impact of passive flow on the stocks, and the impact of the changes on the June rebalance of the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>. </p>

It seems to be spin-off season in Korea.Three Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) constituents will be suspended from trading from 29 April - LG Corp (003550 KS), F&amp;F Co Ltd (007700 KS) and Ecopro Co Ltd (086520 KS) due to a spin-off of its businesses.F&amp;F Co Ltd (007700 KS) will resume trading on 21 May, LG Corp (003550 KS) will resume trading on 27 May, and Ecopro Co Ltd (086520 KS) will resume trading on 28 May.LG Corp (003550 KS) will remain in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and its spinoff will be added to the index, F&amp;F Co Ltd (007700 KS) will remain in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) but the spinoff will not be added to the index, Ecopro Co Ltd (086520 KS) will continue to be a KOSDAQ 150 Index (KOSDQ150 INDEX) constituent though its spinoff will not be included in the index.In this Insight, we look at the index treatment, the impact of passive flow on the stocks, and the impact of the changes on the June rebalance of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX). 

<p><a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> is a biopharmaceutical company that focuses on the discovery and production of vaccines. The company was spun off from <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS)</a> in 2018 and is now 68.65% owned by SK Chemicals.</p><p>The company issued stock at KRW 65,000/share in the IPO and the stock closed limit up at KRW 169,000 on listing day. Since then, the stock has dropped 30% and is trading at the lows since listing. The stock has been stable over the last few days as volumes taper off and a lot of flippers have likely exited the stock.</p><p>With 2 days to go in the 15 day period that is used to determine Fast Entry for new listings in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a>, we take a look at the probability of the stock getting Fast Entry into the index, the lock up expiry schedule and the impact of passive buying on the stock.</p><p>If included in the index, passive trackers will need to buy over 4% of the free floating <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> stock as of the implementation date. We see <a href="https://www.smartkarma.com/entities/sebang-global-battery-co-ltd" target="_blank" data-smartkarma-citation="entities:9618:1" rel="noopener">Sebang Global Battery (004490 KS)</a> as the most likely deletion to make way for SK Bioscience in the index.</p>

SK Bioscience (302440 KS) is a biopharmaceutical company that focuses on the discovery and production of vaccines. The company was spun off from Sk Chemicals Co Ltd/New (285130 KS) in 2018 and is now 68.65% owned by SK Chemicals.The company issued stock at KRW 65,000/share in the IPO and the stock closed limit up at KRW 169,000 on listing day. Since then, the stock has dropped 30% and is trading at the lows since listing. The stock has been stable over the last few days as volumes taper off and a lot of flippers have likely exited the stock.With 2 days to go in the 15 day period that is used to determine Fast Entry for new listings in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX), we take a look at the probability of the stock getting Fast Entry into the index, the lock up expiry schedule and the impact of passive buying on the stock.If included in the index, passive trackers will need to buy over 4% of the free floating SK Bioscience (302440 KS) stock as of the implementation date. We see Sebang Global Battery (004490 KS) as the most likely deletion to make way for SK Bioscience in the index.

SK Bioscience IPO: KOSPI200 Fast Entry Guaranteed; SGBC Most Likely Deletion

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Korea Stock Exchange KOSPI 200 / Technical Analysis

<div>Base case remains to buy risk on dips in our core long group in Asia and will then measure new highs toward rising wedge resistance targets as exhaustive patterns mature and set up an excellent short after mid April.</div><div></div><div>Korea displays the best near term bull breakout potential.</div><div></div><div>Taiwan shows better energy off of trendline support but at the topside of the wedge will shift to a macro short. NDX rally stall will play into Taiwan in late April.</div><div></div><div>India needs ignition off of critical wedge support to gain bull traction. Bank index pivot.</div><div></div><div>Japan's timid recovery amid weaker undercurrents is in our crosshairs as a macro short set up.</div><div></div><div>HK is a tactical fade/short but on the next low attempt will shift into the laggard bull camp.</div>

Base case remains to buy risk on dips in our core long group in Asia and will then measure new highs toward rising wedge resistance targets as exhaustive patterns mature and set up an excellent short after mid April.Korea displays the best near term bull breakout potential.Taiwan shows better energy off of trendline support but at the topside of the wedge will shift to a macro short. NDX rally stall will play into Taiwan in late April.India needs ignition off of critical wedge support to gain bull traction. Bank index pivot.Japan's timid recovery amid weaker undercurrents is in our crosshairs as a macro short set up.HK is a tactical fade/short but on the next low attempt will shift into the laggard bull camp.

<p>The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a>, SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.</p><p>The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.</p><p>The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.</p><p>Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.</p><p>In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.</p>

The Stock Exchange of Thailand (SET) has commenced a market consultation on changing the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), SET100 and SETHD indices to free float market cap weighted indices from the upcoming rebalance in June.The market consultation document is short on detail, but the main points are the change in index calculation from full market cap weighted to free float market cap weighted, implementation of the changes in two tranches at the June and December reviews, and implementation of quarterly changes in free float for moves of +/-5%.The biggest uncertainty for us is whether the selection of the stocks for inclusion/exclusion will use the full market cap or the free float market cap.Using the full market cap for stock selection could see 3 changes at the upcoming June review, while using free float market cap for stock selection could result in up to 6 changes at the review. The two step implementation of the free float changes will dampen the index turnover but it will still be relatively high, ranging from a one-way turnover of 7.8% for changes in free float only to 9.52% if the stock selection methodology uses free float market cap.In this Insight, we look at the proposed changes and enumerate three scenarios, the changes they will entail, the impact on the stocks and the turnover for each scenario.

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

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)

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Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

KOSDAQ150 Index Rebalance Preview: 15 Potential Changes; Big Impact on Deletions

We see 15 potential changes to the KOSDAQ150 Index at the June review. With short selling resuming on 3 May, the inclusions could outperform the...

Brian Freitas

Korea Spin-Offs: Index Treatment

LG Corp, F&F and Ecopro will be suspended from trading on 29 April due to their spin offs. Passive funds will sell stock at the close on 28 April...

Brian Freitas

SK Bioscience IPO: KOSPI200 Fast Entry Guaranteed; SGBC Most Likely Deletion

SK Bioscience's Fast Entry into the KOSPI200 Index is almost guaranteed. We see SGBC as the most likely deletion. With a lot of shares still locked...

Brian Freitas

Asia Top Long/Short Bets for April

Base case remains to buy risk on dips in our core long group in Asia. Measure new highs near rising wedge targets as exhaustive patterns mature and...

Thomas Schroeder

SET50 Index - Proposed Methodology Changes: Scenarios, Names Affected & Impact

The SET has commenced a market consultation on the proposed changes to make its indices free float market cap weighted. We look at the impact on...

Brian Freitas

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