Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight">
<p>On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th. The Climate Change index is an index designed to help attract investment by giving higher investment weight to listed companies that have secured low-carbon-related technologies and products.</p>
<p>According to KRX, it has developed these indices to meet various demands in the context of growing global interest in climate change issues and the expansion of environmental, social and governance (ESG) investments. </p>
</div>


On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th. The Climate Change index is an index designed to help attract investment by giving higher investment weight to listed companies that have secured low-carbon-related technologies and products.
According to KRX, it has developed these indices to meet various demands in the context of growing global interest in climate change issues and the expansion of environmental, social and governance (ESG) investments. 


The Launch of Three New Climate Change Indices by the KRX

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Event-Driven

<p>is <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> overvalued or undervalued?   It depends on the what investors see as the right comps and given the current situation regards to <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a> ,  there is a growing possibility that <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a> looks to diversify away from <a href="https://www.smartkarma.com/entities/hon-hai-precision-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:745:1" rel="noopener">Hon Hai Precision Industry (2317 TT)</a> sooner versus later. </p>

is LG Electronics (066570 KS) overvalued or undervalued?   It depends on the what investors see as the right comps and given the current situation regards to DiDi Chuxing (DIDI US) ,  there is a growing possibility that Apple Inc (AAPL US) looks to diversify away from Hon Hai Precision Industry (2317 TT) sooner versus later. 

Does LG Group Hold Leverage over Apple and Not the Other Way Around?

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.

<p>As expected, the WISE Secondary Cell Index rebalancing had only one addition (SK IE Technology) and one deletion (Ecopro HN).</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 185.739px;" data-sheets-value='{"1":2,"2":"WISE Secondary Cell Index tracking ETFs"}'>WISE Secondary Cell Index tracking ETFs</td>
<td style="text-align: right; width: 102.401px;" data-sheets-value='{"1":2,"2":"Index weight on July 8"}'>Index weight on July 8</td>
<td style="text-align: right; width: 108.423px;" data-sheets-value='{"1":2,"2":"Index weight on July 9"}'>Index weight on July 9</td>
<td style="text-align: right; width: 117.457px;" data-sheets-value='{"1":2,"2":"Weight change"}'>Rebalancing weight change</td>
<td style="text-align: right; width: 116.463px;" data-sheets-value='{"1":2,"2":"Passive flow impact over 30-day ADTV"}'>Passive flow impact over 30-day ADTV</td>
<td style="text-align: right; width: 115.526px;" data-sheets-value='{"1":2,"2":"Note"}'>Note</td>
</tr>
<tr>
<td style="width: 185.739px;" data-sheets-value='{"1":2,"2":"SK IE Technology Co Ltd"}'><strong>SK IE Technology Co Ltd</strong></td>
<td style="text-align: right; width: 102.401px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'>0.00%</td>
<td style="text-align: right; width: 108.423px;" data-sheets-value='{"1":3,"3":0.103}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>10.30%</strong></td>
<td style="text-align: right; width: 117.457px;" data-sheets-value='{"1":3,"3":0.103}' data-sheets-numberformat='[null,3,"0.00%p",1]'><strong>10.30%p</strong></td>
<td style="text-align: right; width: 116.463px;" data-sheets-value='{"1":3,"3":0.8322826815876188}' data-sheets-numberformat='[null,2,"#,##0.00x",1]'>0.83x</td>
<td style="text-align: right; width: 115.526px;" data-sheets-value='{"1":2,"2":"Add"}'>Add</td>
</tr>
<tr>
<td style="width: 185.739px;" data-sheets-value='{"1":2,"2":"Ecopro HN Co Ltd"}'><strong>Ecopro HN Co Ltd</strong></td>
<td style="text-align: right; width: 102.401px;" data-sheets-value='{"1":3,"3":0.0192}' data-sheets-numberformat='[null,3,"0.00%",1]'>1.92%</td>
<td style="text-align: right; width: 108.423px;" data-sheets-value='{"1":3,"3":0}' data-sheets-numberformat='[null,3,"0.00%",1]'><strong>0.00%</strong></td>
<td style="text-align: right; width: 117.457px;" data-sheets-value='{"1":3,"3":-0.0192}' data-sheets-numberformat='[null,3,"0.00%p",1]'><strong>-1.92%p</strong></td>
<td style="text-align: right; width: 116.463px;" data-sheets-value='{"1":3,"3":-1.410787207953604}' data-sheets-numberformat='[null,2,"#,##0.00x",1]'>-1.41x</td>
<td style="text-align: right; width: 115.526px;" data-sheets-value='{"1":2,"2":"Delete"}'>Delete</td>
</tr>
<tr><td colspan="6" rowspan="1" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; WISE Index"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'>Source: KRX &amp; WISE Index</td></tr>
</tbody>
</table><p>The WISE rechargeable battery theme index is calculated using a market capitalization-weighted method using AI keyword analysis for stocks published by securities companies. If the stock has a market cap of 10% or more, the weight is reset at the 10% ceiling in the quarterly rebalancing, which is the day after the option expiration date in January, April, July, and October.</p><p>Unlike the FnGuide Secondary Battery Industry Index, which uses a scoring system to take a more active approach to change constituent stocks, the WISE Secondary Cell Index adopts a comprehensive selection method. So, the selection of excluded stocks is not as flexible.</p><p><strong>There is currently one ETF tracking the index, with an AUM of ₩853.8B as of last Friday's close.</strong></p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Rebalancing schedule"}'>Index &amp; ETF summary</td></tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"Rebalancing cycle"}'>Rebalancing cycle</td>
<td style="width: 491.009px;" data-sheets-value='{"1":2,"2":"Quarterly"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'>Quarterly</td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"Rebalancing month"}'>Rebalancing month</td>
<td style="width: 491.009px;" data-sheets-value='{"1":2,"2":"January, April, July, and October"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'><div><div>January, April, July, and October</div></div></td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"Implementation date"}'>Implementation date</td>
<td style="width: 491.009px;" data-sheets-value='{"1":2,"2":"The trading day following the option expiration dates"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'><div><div>The trading day following the option expiration dates</div></div></td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"Screening base date"}'>Screening base date</td>
<td style="width: 491.009px;" data-sheets-value='{"1":2,"2":"The last trading day of the month preceding the date of regular rebalancing"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'><div><div>The last trading day of the month preceding the date of regular rebalancing</div></div></td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"ETF"}'><strong>ETF</strong></td>
<td style="width: 491.009px;" data-sheets-value='{"1":2,"2":"Mirae Asset TIGER Secondary Cell ETF"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[6]C[-1]"><div><div><strong>Mirae Asset TIGER Secondary Cell ETF</strong></div></div></td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"Ticker"}'><strong>Ticker</strong></td>
<td style="width: 491.009px;" data-sheets-value='{"1":3,"3":305540}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[5]C[0]"><strong>305540</strong></td>
</tr>
<tr>
<td style="width: 255px;" data-sheets-value='{"1":2,"2":"AUM"}'><strong>AUM</strong></td>
<td style="width: 491.009px;" data-sheets-value='{"1":3,"3":853.828}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]' data-sheets-formula="=R[4]C[1]"><strong>₩853.8B</strong></td>
</tr>
<tr><td colspan="2" style="width: 746.008px;" data-sheets-value='{"1":2,"2":"Source: KRX &amp; WISE Index"}' data-sheets-numberformat='[null,2,"₩#,##0.0B"]'>Source: KRX &amp; WISE Index</td></tr>
</tbody>
</table>

As expected, the WISE Secondary Cell Index rebalancing had only one addition (SK IE Technology) and one deletion (Ecopro HN).










WISE Secondary Cell Index tracking ETFs
Index weight on July 8
Index weight on July 9
Rebalancing weight change
Passive flow impact over 30-day ADTV
Note


SK IE Technology Co Ltd
0.00%
10.30%
10.30%p
0.83x
Add


Ecopro HN Co Ltd
1.92%
0.00%
-1.92%p
-1.41x
Delete

Source: KRX &amp; WISE Index

The WISE rechargeable battery theme index is calculated using a market capitalization-weighted method using AI keyword analysis for stocks published by securities companies. If the stock has a market cap of 10% or more, the weight is reset at the 10% ceiling in the quarterly rebalancing, which is the day after the option expiration date in January, April, July, and October.Unlike the FnGuide Secondary Battery Industry Index, which uses a scoring system to take a more active approach to change constituent stocks, the WISE Secondary Cell Index adopts a comprehensive selection method. So, the selection of excluded stocks is not as flexible.There is currently one ETF tracking the index, with an AUM of ₩853.8B as of last Friday's close.





Index &amp; ETF summary

Rebalancing cycle
Quarterly


Rebalancing month
January, April, July, and October


Implementation date
The trading day following the option expiration dates


Screening base date
The last trading day of the month preceding the date of regular rebalancing


ETF
Mirae Asset TIGER Secondary Cell ETF


Ticker
305540


AUM
₩853.8B

Source: KRX &amp; WISE Index



WISE Battery Index Rebalancing Results & What's Next in the Upcoming Rebalancing

<p>This insight provides major highlights of a new book called <em><strong>'A New Path for ESG with the NPS,' </strong></em>written by Kim Yong-Jin (CEO of NPS). This book was recently published in May 2021. Given that this book was written by the head of NPS (National Pension Service of Korea) which has such an immense influence in the Korean financial markets, this book is worth the read. This book is not yet available in English.</p><p>In Part I of this insight, we focus on the following six major themes regarding ESG (with emphasis on Korea):</p><p style="padding-left: 25px;"><strong>1) ESG's Impact on Korean Stock Market &amp; Indices</strong></p><p style="padding-left: 25px;"><strong>2) Beginnings &amp; Reporting Standards of the ESG Movement</strong></p><p style="padding-left: 25px;"><strong>3) Key Korean Companies Highlighted for Their ESG Improvements</strong></p><p style="padding-left: 25px;"><strong>4) Growth of the ESG Bond Market</strong></p><p style="padding-left: 25px;"><strong>5) Impact of ESG on ETFs</strong></p><p style="padding-left: 25px;"><strong>6) Stakeholder Capitalism vs. Maximizing Shareholder Value</strong></p>

This insight provides major highlights of a new book called 'A New Path for ESG with the NPS,' written by Kim Yong-Jin (CEO of NPS). This book was recently published in May 2021. Given that this book was written by the head of NPS (National Pension Service of Korea) which has such an immense influence in the Korean financial markets, this book is worth the read. This book is not yet available in English.In Part I of this insight, we focus on the following six major themes regarding ESG (with emphasis on Korea):1) ESG's Impact on Korean Stock Market &amp; Indices2) Beginnings &amp; Reporting Standards of the ESG Movement3) Key Korean Companies Highlighted for Their ESG Improvements4) Growth of the ESG Bond Market5) Impact of ESG on ETFs6) Stakeholder Capitalism vs. Maximizing Shareholder Value

A New Path for ESG with the NPS (Major Highlights of a New Book) - Part I

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong short data will be published after market close on 6 July due to the issuance of Black Rainstorm signal on 28 June and the public holiday on 1 July.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp (6753 JP)</a>, <a href="https://www.smartkarma.com/entities/plus-alpha-consulting-co-ltd" target="_blank" data-smartkarma-citation="entities:33441:1" rel="noopener">Plus Alpha Consulting (4071 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a>, <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/frontier-real-estate-invest" target="_blank" data-smartkarma-citation="entities:13526:1" rel="noopener">Frontier Real Estate Invest (8964 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a> and <a href="https://www.smartkarma.com/entities/park24-co-ltd" target="_blank" data-smartkarma-citation="entities:5622:1" rel="noopener">Park24 Co Ltd (4666 JP)</a>. Shorts increased the most in the Consumer Discretionary, Industrials and Consumer Staples sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/hanwha-solutions" target="_blank" data-smartkarma-citation="entities:8656:1" rel="noopener">Hanwha Solutions (009830 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/shinpoong-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7296:1" rel="noopener">Shinpoong Pharmaceutical (019170 KS)</a> and <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-chem-ltd" target="_blank" data-smartkarma-citation="entities:3583:1" rel="noopener">LG Chem Ltd (051910 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/micro-star-international-co" target="_blank" data-smartkarma-citation="entities:8871:1" rel="noopener">Micro Star International Co (2377 TT)</a>, <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a>, <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a> and <a href="https://www.smartkarma.com/entities/ta-chen-stainless-pipe-co-ltd" target="_blank" data-smartkarma-citation="entities:2519:1" rel="noopener">TA Chen Stainless Pipe (2027 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/formosa-laboratories-inc" target="_blank" data-smartkarma-citation="entities:17658:1" rel="noopener">Formosa Laboratories (4746 TT)</a>, <a href="https://www.smartkarma.com/entities/china-steel-corp" target="_blank" data-smartkarma-citation="entities:962:1" rel="noopener">China Steel (2002 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a> and <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong short data will be published after market close on 6 July due to the issuance of Black Rainstorm signal on 28 June and the public holiday on 1 July.In Japan, stocks increased on Sharp Corp (6753 JP), Plus Alpha Consulting (4071 JP), Mitsubishi Corp (8058 JP), Cocokara Fine (3098 JP) and Rakuten Inc (4755 JP) while there was short covering on Frontier Real Estate Invest (8964 JP), Monex Group Inc (8698 JP), Anritsu Corp (6754 JP), Harmonic Drive Systems (6324 JP) and Park24 Co Ltd (4666 JP). Shorts increased the most in the Consumer Discretionary, Industrials and Consumer Staples sectors.In Korea, shorts increased on Doosan Heavy Industries &amp; Construction (034020 KS), Hanwha Solutions (009830 KS), Celltrion Inc (068270 KS), Shinpoong Pharmaceutical (019170 KS) and HMM Co., Ltd. (011200 KS) while shorts were covered on SK Hynix (000660 KS), Doosan Infracore (042670 KS), Naver Corp (035420 KS), Samsung Electronics (005930 KS) and LG Chem Ltd (051910 KS).In Taiwan, shorts increased on AU Optronics (2409 TT), Micro Star International Co (2377 TT), Walsin Technology (2492 TT), Asustek Computer (2357 TT) and TA Chen Stainless Pipe (2027 TT) while shorts covered on Formosa Laboratories (4746 TT), China Steel (2002 TT), Yang Ming Marine Transport (2609 TT), Taiwan Cement (1101 TT) and Largan Precision (3008 TT). 

Asia Shorts: Sharp, Cocokara, Rakuten, Park24, Doosan, HMM, Hynix, LG Chem, AUO, Yang Ming, Largan

South Korea

LG Chem Ltd. is a chemical manufacturer.  The Company's products include petrochemicals, plastic resins, and engineering plastics.  LG Chem also produces industrial and electronic materials.

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LG Chem Ltd (051910 KS)

The Launch of Three New Climate Change Indices by the KRX

On July 14th, the Korean Exchange announced that it will announce three new KRX Climate Change related indices on July 19th.

Douglas Kim

Does LG Group Hold Leverage over Apple and Not the Other Way Around?

Apple needs LG more than vice versa? The current situation might force Apple to diversify away from Hon Hai faster than anticipated

Ken S. Kim

WISE Battery Index Rebalancing Results & What's Next in the Upcoming Rebalancing

This post analyzes the rebalancing results and trading patterns of the WISE Battery Index and discusses changes in constituent stocks of the next...

Sanghyun Park

A New Path for ESG with the NPS (Major Highlights of a New Book) - Part I

This insight provides major highlights of a new book called 'A New Path for ESG with the NPS,' written by Kim Yong-Jin (CEO of NPS).

Douglas Kim

Asia Shorts: Sharp, Cocokara, Rakuten, Park24, Doosan, HMM, Hynix, LG Chem, AUO, Yang Ming, Largan

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

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