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>The KOSPI 200 June Review will have a total of 13 float rate changes: 11 increases and 2 reductions.</li>
<li>
<a href="https://www.smartkarma.com/entities/kakaobank-corp" target="_blank" data-smartkarma-citation="entities:33501:1" rel="noopener">Kakao Bank (323410)</a> will experience the biggest change, followed by <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM (011200)</a> and <a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (259960)</a>. The float rate of <a href="https://www.smartkarma.com/entities/hdc-hyundai-development-co-engineering-construction" target="_blank" data-smartkarma-citation="entities:27397:1" rel="noopener">HDC Hyundai Development (294870)</a> and <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670)</a> will decrease.</li>
<li>
Kakao Bank and <a href="https://www.smartkarma.com/entities/kakao-pay-corp" target="_blank" data-smartkarma-citation="entities:29675:1" rel="noopener">Kakao Pay (377300)</a> have the most significant passive impact. And <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550)</a>, <a href="https://www.smartkarma.com/entities/woori-financial-group-inc" target="_blank" data-smartkarma-citation="entities:27995:1" rel="noopener">Woori Financial Group (316140)</a>, and <a href="https://www.smartkarma.com/entities/krafton-inc" target="_blank" data-smartkarma-citation="entities:28956:1" rel="noopener"> Krafton Inc (259960)</a> are also worth noting.</li>
</ul>


The KOSPI 200 June Review will have a total of 13 float rate changes: 11 increases and 2 reductions.

Kakao Bank (323410) will experience the biggest change, followed by HMM (011200) and  Krafton Inc (259960). The float rate of HDC Hyundai Development (294870) and Doosan Infracore (042670) will decrease.

Kakao Bank and Kakao Pay (377300) have the most significant passive impact. And LG Corp (003550), Woori Financial Group (316140), and  Krafton Inc (259960) are also worth noting.


KOSPI 200 Constituents with a Float Rate Change: 11 Increases & 2 Reductions

<ul>
<li>A noteworthy flow trend in the Korean stock market is the National Pension Service's local equity purchase. For this, they tend to overweight those previously underweighted blue-chip stocks. </li>
<li>All of the top 10 most net-bought stocks by local pensions on April 18-26 are KOSPI 200 constituents. And most of them all have a relatively small NPS-owned stake.</li>
<li>Most of them have significantly outperformed the KOSPI 200 (-0.90%) during this period.</li>
</ul>


A noteworthy flow trend in the Korean stock market is the National Pension Service's local equity purchase. For this, they tend to overweight those previously underweighted blue-chip stocks. 
All of the top 10 most net-bought stocks by local pensions on April 18-26 are KOSPI 200 constituents. And most of them all have a relatively small NPS-owned stake.
Most of them have significantly outperformed the KOSPI 200 (-0.90%) during this period.


Noteworthy Flow Trend: Korea NPS Overweighting Local Equity

<ul>
<li>Solactive Global X Lithium (LIT) made an ordinary rebalancing announcement. LG Energy fails to join the Index this time. The inclusion seems to have been pushed back to October.</li>
<li>
LG Energy's short-term flow is likely to receive downward pressure from the 3M IPO lockups to be released today as it cannot expect additional passive inflows in the short term.</li>
<li>These are 1.87M shares (3.7x ADTV). As the share price is still up more than 40% from the IPO price, their profit realization incentives are expected to be quite strong.</li>
</ul>


Solactive Global X Lithium (LIT) made an ordinary rebalancing announcement. LG Energy fails to join the Index this time. The inclusion seems to have been pushed back to October.

LG Energy's short-term flow is likely to receive downward pressure from the 3M IPO lockups to be released today as it cannot expect additional passive inflows in the short term.
These are 1.87M shares (3.7x ADTV). As the share price is still up more than 40% from the IPO price, their profit realization incentives are expected to be quite strong.


LG Energy Fails Inclusion in LIT's April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

<ul>
<li>Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO in Nov 21. Its 6 month lock-up will expire soon.</li>
<li>The stock more than doubled on listing, providing one of the best first day returns in 2021. However, its performance since then hasn’t been all that great.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>


Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO in Nov 21. Its 6 month lock-up will expire soon.
The stock more than doubled on listing, providing one of the best first day returns in 2021. However, its performance since then hasn’t been all that great.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Kakao Pay IPO Lock-Up - IPO Was Great, Performance Since Then Has Been Tepid

<ul>
<li>The FnGuide Top 10 (TIGER ETF) currently has an AUM of ₩1.18T, and the next rebalancing will be on June 13, and the rebalancing trading on June 10.</li>
<li>If we perform the screening based on the current stock prices and the FnGuide-concluded index float rates, the possibility that Shinhan Financial will replace Celltrion is relatively high.</li>
<li>If Shinhan replaces Celltrion, the passive flow size seems more significant than the previous rebalancing. Shinhan will face a passive inflow of 1.17x ADTV, while Celltrion will face -0.61x ADTV.</li>
</ul>


The FnGuide Top 10 (TIGER ETF) currently has an AUM of ₩1.18T, and the next rebalancing will be on June 13, and the rebalancing trading on June 10.
If we perform the screening based on the current stock prices and the FnGuide-concluded index float rates, the possibility that Shinhan Financial will replace Celltrion is relatively high.
If Shinhan replaces Celltrion, the passive flow size seems more significant than the previous rebalancing. Shinhan will face a passive inflow of 1.17x ADTV, while Celltrion will face -0.61x ADTV.


FnGuide Top 10 (TIGER ETF) Rebalancing Preview: Shinhan Financial IN & Celltrion OUT

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

KOSPI 200 Constituents with a Float Rate Change: 11 Increases & 2 Reductions

This post summarizes all the KOSPI 200 constituents, which will likely change their respective float rate in the June Review.

Sanghyun Park

Noteworthy Flow Trend: Korea NPS Overweighting Local Equity

The NPS seems to have recently begun to overweight local equity, and this post investigates this significant flow trend and the stocks worthy of...

Sanghyun Park

LG Energy Fails Inclusion in LIT's April Rebalancing & Faces 3M Lockup Release (3.7x ADTV) Today

LG Energy fails inclusion in Solactive Global X Lithium Index's April rebalancing and faces the 3M IPO lockup release (3.7x ADTV) today.

Sanghyun Park

Kakao Pay IPO Lock-Up - IPO Was Great, Performance Since Then Has Been Tepid

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, raised US$1.3bn in its South Korean IPO in Nov 21. Its 6 month...

Sumeet Singh

FnGuide Top 10 (TIGER ETF) Rebalancing Preview: Shinhan Financial IN & Celltrion OUT

This post previews the semi-annual rebalancing of the FnGuide Top 10 Theme Index (TIGER ETF), which will occur on June 10.

Sanghyun Park

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