Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

'As the Sun Rises' is a weekly publication expected to be released at the start of every week with a view to highlight macro trends and important price action developments across all asset classes. It is designed to be global in nature with particular attention given to developments in Asian markets.

'As the Sun Rises' is a weekly publication expected to be released at the start of every week with a view to highlight macro trends and important price action developments across all asset classes. It is designed to be global in nature with particular attention given to developments in Asian markets.

As the Sun Rises - Bonds, South Korea, Oil, India, USD

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Korea Exchange (KRX) will announce the results of the June 2021 review 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> in May with the changes becoming effective after the close of trading on 10 June.We currently see <a href="https://www.smartkarma.com/entities/taihan-electric-wire-co-ltd" target="_blank" data-smartkarma-citation="entities:11551:1" rel="noopener">Taihan Electric Wire (001440 KS)</a>, <a href="https://www.smartkarma.com/entities/dongwon-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:1783:1" rel="noopener">Dongwon Industries (006040 KS)</a>, <a href="https://www.smartkarma.com/entities/hyosung-advanced-materials-c" target="_blank" data-smartkarma-citation="entities:27751:1" rel="noopener">Hyosung Advanced Materials C (298050 KS)</a> and <a href="https://www.smartkarma.com/entities/hyosung-tnc-co-ltd" target="_blank" data-smartkarma-citation="entities:27749:1" rel="noopener">Hyosung TNC Co Ltd (298020 KS)</a> as potential inclusions in the index, with <a href="https://www.smartkarma.com/entities/taeyoung-engineering-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:18740:1" rel="noopener">Taeyoung Engineering &amp; Construction (009410 KS)</a>, <a href="https://www.smartkarma.com/entities/namsun-aluminum-co-ltd" target="_blank" data-smartkarma-citation="entities:17514:1" rel="noopener">Namsun Aluminum (008350 KS)</a>, <a href="https://www.smartkarma.com/entities/hanil-hyundai-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:14406:1" rel="noopener">Hanil Hyundai Cement (006390 KS)</a> and <a href="https://www.smartkarma.com/entities/binggrae-co-ltd" target="_blank" data-smartkarma-citation="entities:16424:1" rel="noopener">Binggrae Co Ltd (005180 KS)</a> as the corresponding exclusions.<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 expected to list on the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-index" target="_blank" data-smartkarma-citation="entities:22911:1" rel="noopener">Korea Stock Exchange Kospi Index (KOSPI INDEX)</a> market in March and there is a possibility that the stock gets Fast Entry into the index. That could 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> being deleted from the index.<a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (1486402D KS)</a> is another possible Fast Entry into the index though there are few details available on when the stock is expected to list.The short sell ban in Korea has been extended to 2 May. Stocks that are constituents 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> 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> can be short sold from 3 May. The commencement of short selling on these stocks prior to the announcement of the June review changes could result in the expected inclusions outperforming the expected exclusions and opening up other interesting trading strategies.

The Korea Exchange (KRX) will announce the results of the June 2021 review of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) in May with the changes becoming effective after the close of trading on 10 June.We currently see Taihan Electric Wire (001440 KS), Dongwon Industries (006040 KS), Hyosung Advanced Materials C (298050 KS) and Hyosung TNC Co Ltd (298020 KS) as potential inclusions in the index, with Taeyoung Engineering &amp; Construction (009410 KS), Namsun Aluminum (008350 KS), Hanil Hyundai Cement (006390 KS) and Binggrae Co Ltd (005180 KS) as the corresponding exclusions.SK Bioscience (302440 KS) is expected to list on the Korea Stock Exchange Kospi Index (KOSPI INDEX) market in March and there is a possibility that the stock gets Fast Entry into the index. That could see Sebang Global Battery (004490 KS) being deleted from the index. Krafton Inc (1486402D KS) is another possible Fast Entry into the index though there are few details available on when the stock is expected to list.The short sell ban in Korea has been extended to 2 May. Stocks that are constituents of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) can be short sold from 3 May. The commencement of short selling on these stocks prior to the announcement of the June review changes could result in the expected inclusions outperforming the expected exclusions and opening up other interesting trading strategies.

KOSPI200 Index Rebalance Preview: Increasing Number of Potential Changes

The short sell ban in Korea that was instated on 16 March 2020 is set to expire on 15 March.However, with mayoral elections in Seoul and Busan around the corner, politicians are said to be leaning on the FSC to extend the short sell ban. Add to that the retail outrage - from petitions to the Blue House, bus tours, and posts on K-Streetbets of targeting stocks with high short interest.There is a high likelihood that the short sell ban gets extended by three more months to tide the politicians over the mayoral elections.In the event that the short sell ban expires, we highlight stocks that have seen the most short covering since the start of the short sell ban, stocks with high short interest as a percentage of market cap and free float, and high days of ADV to cover.This will have implications for many strategies and will open the door to trade the ordinaries vs preferred shares, long/short and other related strategies.

The short sell ban in Korea that was instated on 16 March 2020 is set to expire on 15 March.However, with mayoral elections in Seoul and Busan around the corner, politicians are said to be leaning on the FSC to extend the short sell ban. Add to that the retail outrage - from petitions to the Blue House, bus tours, and posts on K-Streetbets of targeting stocks with high short interest.There is a high likelihood that the short sell ban gets extended by three more months to tide the politicians over the mayoral elections.In the event that the short sell ban expires, we highlight stocks that have seen the most short covering since the start of the short sell ban, stocks with high short interest as a percentage of market cap and free float, and high days of ADV to cover.This will have implications for many strategies and will open the door to trade the ordinaries vs preferred shares, long/short and other related strategies.

Korea Short Sell Ban: Elections, Public Outrage, Bus Tours, Blue House Petitions, K-Streetbets

Earlier this month a note titled <a href="https://www.smartkarma.com/insights/the-pain-and-the-gain-in-equities-and-fx" target="_blank" data-smartkarma-citation="insights:47142" rel="noopener">The Pain and the Gain in Equities and FX</a> was shared on SmartKarma trying to highlight the short term risks in these markets. In that note it was concluded that one should “look out for opportunities to re-engage in equity markets anywhere between 5%-10% below current levels. Similarly expect signals to short the USD again over the weeks ahead.”
As we now appear to be in the middle of this correction down in many equity indices, the following note attempts to highlight key support zones for major indices around the world in preparation for re-engaging in markets for a longer lasting and more underlying bull trend.

Earlier this month a note titled The Pain and the Gain in Equities and FX was shared on SmartKarma trying to highlight the short term risks in these markets. In that note it was concluded that one should “look out for opportunities to re-engage in equity markets anywhere between 5%-10% below current levels. Similarly expect signals to short the USD again over the weeks ahead.”
As we now appear to be in the middle of this correction down in many equity indices, the following note attempts to highlight key support zones for major indices around the world in preparation for re-engaging in markets for a longer lasting and more underlying bull trend. 

Where to Prepare for the 'Gain' in Equities

The last time we saw a major market panic, before Covid, and subsequent delivery of aggressive economic policies - largely monetary - was in 2009. Remarkably, the stock market performance since March 2020 has been very similar to 2009-2010. What indication does this comparison offer today? The answer is "some short term pain and some long term gain". In addition there are other indications across Oil, Bonds, the USD and in Asia South Korea which further supports this thesis.

The last time we saw a major market panic, before Covid, and subsequent delivery of aggressive economic policies - largely monetary - was in 2009. Remarkably, the stock market performance since March 2020 has been very similar to 2009-2010. What indication does this comparison offer today? The answer is "some short term pain and some long term gain". In addition there are other indications across Oil, Bonds, the USD and in Asia South Korea which further supports this thesis. 

South Korea

The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The Index was developed with a base value of 100 as of January 4, 1980. Note: The preferred shares are excluded in calculating the KOSPI Index from June 14, 2002. 

Korea Stock Exchange Kospi Index (KOSPI INDEX)

Korea Stock Exchange Kospi Index (KOSPI INDEX)

As the Sun Rises - Bonds, South Korea, Oil, India, USD

Cross market & price action developments to note at the start of the week across global markets with particular focus on Asia - Currencies, Bonds,...

Shyam Devani

KOSPI200 Index Rebalance Preview: Increasing Number of Potential Changes

We see 4 potential changes to the KOSPI200 index at the June review (up from 1 change in Nov). With the short sell ban expiring on 2 May for...

Brian Freitas

Korea Short Sell Ban: Elections, Public Outrage, Bus Tours, Blue House Petitions, K-Streetbets

With the short sell ban in Korea scheduled to expire 15 March, we look at stocks that have seen the most short covering since the start of the ban,...

Brian Freitas

Where to Prepare for the 'Gain' in Equities

As we correct down in many equity indices, this note attempts to identify levels where markets are likely to be supported

Shyam Devani

The Pain and the Gain in Equities and FX

New year celebrations are over and there are bumps along the road for Equity and USD trends - beware we are going over one now.

Shyam Devani