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

<ul>
<li>One noteworthy aspect is SK Square's strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.</li>
<li>Given SK's aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.</li>
<li>We may consider positioning to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.</li>
</ul>


One noteworthy aspect is SK Square's strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.
Given SK's aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.
We may consider positioning to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.


Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a>, <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ150 Index</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI300 Index</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50 INDEX</a> and a bunch of other onshore China indices were implemented last week.</li>
<li>The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.</li>
<li>AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.</li>
</ul>


The changes for the KOSPI2 INDEX, KOSDAQ150 Index, CSI300 Index, STAR50 INDEX and a bunch of other onshore China indices were implemented last week.
The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.
AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.


Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>We recently visited some start-up game companies in China and concluded that the Chinese gaming market has entered a matured period of competition for existing users;</li>
<li>Tencent's games remain relatively stable, but information about new RMB 10bn level blockbusters is still unknown. New shooting games continue to appear, putting pressure on existing survival shooting games;</li>
<li>We (1) maintain our BUY for Tencent and Unity, (2) maintain SELL for Sea, and (3) downgrade Krafton to SELL to reflect the new competition that shooting games will face.</li>
</ul>


We recently visited some start-up game companies in China and concluded that the Chinese gaming market has entered a matured period of competition for existing users;
Tencent's games remain relatively stable, but information about new RMB 10bn level blockbusters is still unknown. New shooting games continue to appear, putting pressure on existing survival shooting games;
We (1) maintain our BUY for Tencent and Unity, (2) maintain SELL for Sea, and (3) downgrade Krafton to SELL to reflect the new competition that shooting games will face.


Tencent/SEA/Unity/Krafton: More Shooting Games Are Emerging, a Summary of Our Recent Channel Checks

<ul>
<li>The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.</li>
<li>There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. Large stock price moves mean no changes for the BBIG Index currently.</li>
<li>
<a href="https://www.smartkarma.com/entities/douzone-bizon-co-ltd" target="_blank" data-smartkarma-citation="entities:20161:1" rel="noopener">Douzone Bizon (012510 KS)</a> has flipped from a passive sell to a passive buy over the last month and the stock could move higher from here.</li>
</ul>


The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. Large stock price moves mean no changes for the BBIG Index currently.

Douzone Bizon (012510 KS) has flipped from a passive sell to a passive buy over the last month and the stock could move higher from here.


KRX New Deal Index Rebalance Preview: A Change for Each Index

ESG Analyst, Who's Good

Heejeong (Hollie) Park

ESG 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>Recently, a controversy surrounding substantial crypto investments in the political sphere has exerted downward pressure on the stock prices of major listed game companies in South Korea. </li>
<li>In the past five years, there has been a shift in the gaming industry's risk landscape, with social risks giving way to governance risks.</li>
<li>Some game companies have started publishing sustainability reports, but challenges arise due to the inconsistency in environmental data and the difficulties in comparing companies.</li>
</ul>


Recently, a controversy surrounding substantial crypto investments in the political sphere has exerted downward pressure on the stock prices of major listed game companies in South Korea. 
In the past five years, there has been a shift in the gaming industry's risk landscape, with social risks giving way to governance risks.
Some game companies have started publishing sustainability reports, but challenges arise due to the inconsistency in environmental data and the difficulties in comparing companies.


ESG Incident Report: Changing Trends in ESG Risks for Major Listed Game Companies in South Korea

South Korea

Krafton, Inc. operates as a game development company. The Company develops console games, mobile games, computer games, and other related products. Krafton markets its products throughout South Korea.

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Krafton (259960 KS)

Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

This post examines shorting situation to capitalize on SK Square's potential block deal for its Krafton stake, aligning with the schedule for...

Sanghyun Park

Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Tencent/SEA/Unity/Krafton: More Shooting Games Are Emerging, a Summary of Our Recent Channel Checks

We (1) maintain our BUY for Tencent and Unity, (2) maintain SELL for Sea, and (3) downgrade Krafton to SELL to reflect the new competition that...

Blue Lotus Research Institute

KRX New Deal Index Rebalance Preview: A Change for Each Index

There is 1 change currently for each of the Secondary Battery, Bio, Internet & Game indices. There are some close contests among the top 3 stocks...

Brian Freitas

ESG Incident Report: Changing Trends in ESG Risks for Major Listed Game Companies in South Korea

This article uncovers the evolving landscape of ESG risks in the gaming industry, including the impact of cryptocurrency controversies and the...

Heejeong (Hollie) Park

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