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 Index / Event-Driven

<ul>
<li>Today's press release unveils details on new flow trading events in Korea's local market from the second half of this year, highlighting two key points.</li>
<li>Firstly, the disclosure rule starts with block deals from August 23rd. Secondly, a 30% or greater stock price correction on disclosure day may cancel the transaction plan.</li>
<li>This highlights the need to consider cancellation risks in pre-disclosure positions and design setups with consideration for the potential for reverse flows as stock prices approach 30% corrections.</li>
</ul>


Today's press release unveils details on new flow trading events in Korea's local market from the second half of this year, highlighting two key points.
Firstly, the disclosure rule starts with block deals from August 23rd. Secondly, a 30% or greater stock price correction on disclosure day may cancel the transaction plan.
This highlights the need to consider cancellation risks in pre-disclosure positions and design setups with consideration for the potential for reverse flows as stock prices approach 30% corrections.


Details of Block Deal Pre-Disclosure Rule Disclosed: Cancellation Risk from 30% Price Correction

<ul>
<li>Kim Byung-hwan addressed criticism of weak incentives in tax support for the value-up policy, emphasizing boosting dividends. His background suggests effective advocacy for tax reforms in his new role.</li>
<li>He prioritized abolishing the FIIT in the National Assembly, citing its hindrance to capital market liquidity and investment promotion, indicating a robust approach to the value-up policy.</li>
<li>Kim’s appointment as FSC Chairman signals the government's commitment to advancing the value-up policy. He emphasizes boosting dividends and aligning tax policies accordingly, shaping trading strategies toward dividend-expanding companies.</li>
</ul>


Kim Byung-hwan addressed criticism of weak incentives in tax support for the value-up policy, emphasizing boosting dividends. His background suggests effective advocacy for tax reforms in his new role.
He prioritized abolishing the FIIT in the National Assembly, citing its hindrance to capital market liquidity and investment promotion, indicating a robust approach to the value-up policy.
Kim’s appointment as FSC Chairman signals the government's commitment to advancing the value-up policy. He emphasizes boosting dividends and aligning tax policies accordingly, shaping trading strategies toward dividend-expanding companies.


Impact of Kim Byung-Hwan's Appointment as Korea FSC Chairman on Value-Up Policy

<ul>
<li>Limiting extensions to four times after a 90-day repayment and mandating repayment after 12 months increases short-selling costs. The revision omits limits on position-holding cycles, disappointing retail investors.</li>
<li>Today's release did not set a timeline for short-selling resumption. The ruling party has requested it after March 2025, with key officials present suggesting next year March resumption.</li>
<li>Regarding the electronic system implementation, core content aligns with the draft, but newly revealed institution numbers add a new perspective. Uncertainties remain on integrating overseas stock borrowing into the system.</li>
</ul>


Limiting extensions to four times after a 90-day repayment and mandating repayment after 12 months increases short-selling costs. The revision omits limits on position-holding cycles, disappointing retail investors.
Today's release did not set a timeline for short-selling resumption. The ruling party has requested it after March 2025, with key officials present suggesting next year March resumption.
Regarding the electronic system implementation, core content aligns with the draft, but newly revealed institution numbers add a new perspective. Uncertainties remain on integrating overseas stock borrowing into the system.


Specifics of Korea's Official Short-Selling Regulations, Announced This Morning

<ul>
<li>Starting May 27th, KRX-listed firms can voluntarily disclose value-up details, publicly available on the website. Additionally, view five investment indicators for all KRX-listed companies below.</li>
<li>Finalized version similar to draft, with added content requested by listed companies, like R&amp;D investment growth rate. Tax incentives excluded, awaiting alignment with Ministry's plan in July.</li>
<li>KRX keeps a screening framework for the index akin to March's criteria, with ROE likely having the highest weight. Recent signals hint at increasing dividend weighting.</li>
</ul>


Starting May 27th, KRX-listed firms can voluntarily disclose value-up details, publicly available on the website. Additionally, view five investment indicators for all KRX-listed companies below.
Finalized version similar to draft, with added content requested by listed companies, like R&amp;D investment growth rate. Tax incentives excluded, awaiting alignment with Ministry's plan in July.
KRX keeps a screening framework for the index akin to March's criteria, with ROE likely having the highest weight. Recent signals hint at increasing dividend weighting.


KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch

ESG Independent Analyst, Who's Good

Emily Jiwon Kim

ESG Independent Analyst

ASIA’S FIRST AI-DRIVEN ESG INSIGHT PROVIDER

Who's Good

Using AI technologies and public data, Who’s Good provides objective and up-to-date corporate ESG insights on Asian companies.

WHY WHO'S GOOD

* Time-sensitive: Time is the essence in finance. Artificial Intelligence (AI) can process vast amount of information in a short span of time. Our powerful algorithm offers real-time in-depth corporate ESG analysis with out compromising its quality.
* Objective: We turned to public big data and news big data as source to base our analysis on and to preserve impartiality. We leverage 350 public big data sources and 93 news data sources in Korea to uncover insights.
* Insightful: Who’s Good ESG analysis coverage extends to all listed and non-listed companies in Korea. This allows us to provide a comprehensive insight into the Korean market.
* Global approach to ESG: Our ESG research framework is built on international standards and principles including UN Global Compact, ISO 26000, ICGN and CFA Guidelines on Corporate Governance to meet the global standards.

<ul>
<li>Our analysis of 23,419 news articles on 2,699 companies reported between Jan 1 and Dec 31, 2021, reveals that a total of 623 companies had incidents related to ESG topics.</li>
<li>167 companies (83.5%) among the 200 largest listed companies (KOSPI 200) were involved in ESG incidents.</li>
<li>Of the 23,419 news articles covering ESG incidents, 17,245 were related to KOSPI 200 companies, accounting for 73.6%.</li>
</ul>


Our analysis of 23,419 news articles on 2,699 companies reported between Jan 1 and Dec 31, 2021, reveals that a total of 623 companies had incidents related to ESG topics.
167 companies (83.5%) among the 200 largest listed companies (KOSPI 200) were involved in ESG incidents.
Of the 23,419 news articles covering ESG incidents, 17,245 were related to KOSPI 200 companies, accounting for 73.6%.


News Analysis on ESG Incidents of 2000+ South Korean Companies (2021)

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)

Details of Block Deal Pre-Disclosure Rule Disclosed: Cancellation Risk from 30% Price Correction

This post outlines the block deal pre-disclosure rule officially released today by Korea FSC, highlighting two key points, notably the risk of...

Sanghyun Park

Impact of Kim Byung-Hwan's Appointment as Korea FSC Chairman on Value-Up Policy

This post explores how Kim Byung-hwan's appointment as the new Chairman of Korea's FSC impacts the local market's value-up policy.

Sanghyun Park

Specifics of Korea's Official Short-Selling Regulations, Announced This Morning

This post outlines the details of Korea's newly updated short selling regulations, which were officially announced this morning by the ruling party...

Sanghyun Park

KRX Announces Final Version of Value-Up Disclosure Guidelines Alongside Dedicated Website Launch

This post covers KRX's latest unveiling of the finalized value-up guidelines and the launch of the dedicated website. It also delves into KRX's...

Sanghyun Park

News Analysis on ESG Incidents of 2000+ South Korean Companies (2021)

Here, we present insights into a broad spectrum of ESG incidents of Korean companies in 2021, broken down into sectors, companies, and ESG topics...

Emily Jiwon Kim