Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Last week, Taihan Electric Wire announced a rights offering of 50% of its outstanding shares.  The company is expected to raise 526 billion won. </li>
<li>Taihan Electric Wire is expected to use the rights offering proceeds to mostly expand its submarine cable production.</li>
<li>With the share price falling 21% since the announcement of the rights offering last week, Taihan Electric Wire looks more attractive.</li>
</ul>


Last week, Taihan Electric Wire announced a rights offering of 50% of its outstanding shares.  The company is expected to raise 526 billion won. 
Taihan Electric Wire is expected to use the rights offering proceeds to mostly expand its submarine cable production.
With the share price falling 21% since the announcement of the rights offering last week, Taihan Electric Wire looks more attractive.


Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Dec 8th which has an aggregated short interest worth USD10.8bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We have highlighted KRX short interest weekly changes in Naver.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Dec 8th which has an aggregated short interest worth USD10.8bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We have highlighted KRX short interest weekly changes in Naver.


KRX Short Interest Weekly (Dec 8th): Naver

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.

<ul>
<li>Given Korea's blanket ban on short-selling, we should concentrate on the likelihood of these ADRs being significantly discounted compared to their underlying shares.</li>
<li>It should persist for an extended period, highlighting the importance of continuously monitoring ADR spreads over the next 2-3 months to seize the opportune entry timing.</li>
<li>Since all these carry single-stock futures, a flexible setup targeting this spread can be designed, ideally incorporating currency hedges.</li>
</ul>


Given Korea's blanket ban on short-selling, we should concentrate on the likelihood of these ADRs being significantly discounted compared to their underlying shares.
It should persist for an extended period, highlighting the importance of continuously monitoring ADR spreads over the next 2-3 months to seize the opportune entry timing.
Since all these carry single-stock futures, a flexible setup targeting this spread can be designed, ideally incorporating currency hedges.


Trading Opportunities Targeting Potential ADR Discount Increases from Korea's Short-Selling Ban

Equity Bottom-Up

<ul>
<li>In this insight, we discuss the recent Korean stock portfolio allocation changes by the NPS.</li>
<li>The data suggests that NPS has been increasing its holdings into more defensive sectors such as insurance, convenience stores, and industrials. </li>
<li>On the other hand, it has been decreasing capital allocation in consumer discretionary related stocks.</li>
</ul>


In this insight, we discuss the recent Korean stock portfolio allocation changes by the NPS.
The data suggests that NPS has been increasing its holdings into more defensive sectors such as insurance, convenience stores, and industrials. 
On the other hand, it has been decreasing capital allocation in consumer discretionary related stocks.


NPS: Increasing Capital Allocation to More Defensive Stocks in Korea

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>
<a href="https://www.smartkarma.com/entities/vidente-co-ltd" target="_blank" data-smartkarma-citation="entities:10357:1" rel="noopener">Vidente (121800 KS)</a> has not submitted its semiannual reports and has been labeled as an 'Administrative Issue'. This means deletion from 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> on 19 August.</li>
<li>
<a href="https://www.smartkarma.com/entities/hancom-inc" target="_blank" data-smartkarma-citation="entities:13366:1" rel="noopener">Hancom Inc (030520 KS)</a> was the highest ranked stock to not be included in the index at the June rebalance. It will now be included in the index.</li>
<li>Passive funds will need to buy KRW 8.8bn of <a href="https://www.smartkarma.com/entities/hancom-inc" target="_blank" data-smartkarma-citation="entities:13366:1" rel="noopener">Hancom Inc (030520 KS)</a> while selling KRW 11.2bn of <a href="https://www.smartkarma.com/entities/vidente-co-ltd" target="_blank" data-smartkarma-citation="entities:10357:1" rel="noopener">Vidente (121800 KS)</a>. </li>
</ul>



Vidente (121800 KS) has not submitted its semiannual reports and has been labeled as an 'Administrative Issue'. This means deletion from the KOSDAQ 150 Index (KOSDQ150 INDEX) on 19 August.

Hancom Inc (030520 KS) was the highest ranked stock to not be included in the index at the June rebalance. It will now be included in the index.
Passive funds will need to buy KRW 8.8bn of Hancom Inc (030520 KS) while selling KRW 11.2bn of Vidente (121800 KS). 


KOSDAQ150 Ad Hoc Index Rebalance: Hancom (030520) To Replace Vidente (121800)

South Korea

LG Display Co., Ltd. develops and manufactures digital display products.  The Company's products include thin film transistor-liquid crystal displays (TFT-LCD) for notebook and desktop computer monitors, TVs, mobile phones, and medical equipment.  LG Display provides its products mainly to overseas markets.

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LG Display (034220 KS)

Taihan Electric Wire: Rights Offering of 50% of Outstanding Shares

With the share price falling 21% since the announcement of the rights offering last week, Taihan Electric Wire looks more attractive.

Douglas Kim

KRX Short Interest Weekly (Dec 8th): Naver

We analyzed the KRX short interest report for the past week and we highlighted weekly KRX short interest changes in Naver.

Ke Yan, CFA, FRM

Trading Opportunities Targeting Potential ADR Discount Increases from Korea's Short-Selling Ban

This post explores trading opportunities targeting potential ADR discount increases resulting from Korea's blanket ban on short selling.

Sanghyun Park

NPS: Increasing Capital Allocation to More Defensive Stocks in Korea

In this insight, we discuss the recent Korean stock portfolio allocation changes by the NPS. The data suggests that NPS has been increasing its...

Douglas Kim

KOSDAQ150 Ad Hoc Index Rebalance: Hancom (030520) To Replace Vidente (121800)

Vidente has been designated as an 'Administrative Issue' and will be deleted from the KOSDAQ150. Hancom will be added to the index and passive...

Brian Freitas

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