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

Event-Driven

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.</li>
<li>A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.</li>
<li>Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.


KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>The Korean Supreme Court's ruling on the stock transfer lawsuit between Hahn &amp; Company private equity fund and Namyang Dairy's Chairman Hong Won-Sik is confirmed for 4 January 2024.</li>
<li>The expectation of Hahn &amp; Co winning this legal dispute has positively impacted the share price of Namyang Dairy Products.</li>
<li>The higher probability scenario is for the Korean Supreme Court to rule in favor of Hahn &amp; Co, agreeing with the decisions of the two lower courts in Korea.</li>
</ul>


The Korean Supreme Court's ruling on the stock transfer lawsuit between Hahn &amp; Company private equity fund and Namyang Dairy's Chairman Hong Won-Sik is confirmed for 4 January 2024.
The expectation of Hahn &amp; Co winning this legal dispute has positively impacted the share price of Namyang Dairy Products.
The higher probability scenario is for the Korean Supreme Court to rule in favor of Hahn &amp; Co, agreeing with the decisions of the two lower courts in Korea.


Namyang Dairy Products: Long Legal Dispute to Be Finally Decided by Supreme Court in January 2024

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices commences on 1 December and will end on 28 February.</li>
<li>We see 5 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 8 stocks moving from SmallCap to MidCap and 1 new addition to MidCap.</li>
<li>The migrations from MidCap to LargeCap have outperformed the other migration categories. Four potential LargeCap to MidCap migrations will be deleted from a global index later this month.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices commences on 1 December and will end on 28 February.
We see 5 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 8 stocks moving from SmallCap to MidCap and 1 new addition to MidCap.
The migrations from MidCap to LargeCap have outperformed the other migration categories. Four potential LargeCap to MidCap migrations will be deleted from a global index later this month.


KOSPI Size Indices: Global Index Selling Leads to Potential Downward Migration

<ul>
<li>The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.</li>
<li>We currently see 3 migrations from MidCap to LargeCap, 3 new adds to LargeCap, 6 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.</li>
<li>Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
We currently see 3 migrations from MidCap to LargeCap, 3 new adds to LargeCap, 6 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.


KOSPI Size Indices - The Outperformance Continues

It was reported after the market close today that <a href="https://finance.naver.com/item/news_read.nhn?article_id=0004593532&amp;office_id=008&amp;code=003920&amp;page=&amp;sm=title_entity_id.basic" target="_blank" rel="noopener">Hahn &amp; Co</a> (a large private equity firm in Korea) has acquired the controlling stake of <a href="https://www.smartkarma.com/entities/namyang-dairy-products-co" target="_blank" data-smartkarma-citation="entities:16249:1" rel="noopener">Namyang Dairy Products Co (003920 KS) </a>from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. <div class="content-highlight">
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 
</div>

It was reported after the market close today that Hahn &amp; Co (a large private equity firm in Korea) has acquired the controlling stake of Namyang Dairy Products Co (003920 KS) from the founder and related parties. Hahn &amp; Co paid 310.7 billion won for a 52.63% (0.379 million shares) of Namyang Dairy, which currently has a market cap of 316 billion won. Prior to the sale, Namyang Dairy Chairman Hong Won-Sik had a 51.68% stake in the company. 
Over the next 2-3 years, we believe Namyang Dairy Products' shares could rise nearly 100%+ from current levels, which would suggest market cap of 632 billion won or 878,000 won. This represents a P/B multiple of 0.7x, which is at the high end of the P/B multiple for the company in the past four years. 
With Hahn &amp; Co getting rid of the bad corporate governance problems and infusing the company with better professional managers, we believe Namyang Dairy Products could be an excellent turn-around story and the valuation multiples could rise to the historical high levels. 


Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

South Korea

Namyang Dairy Products Co., Ltd. produces dairy products, such as milk, baby formula, yogurt, cheese, and ice cream.  The Company provides its products mainly to domestic market.

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Namyang Dairy Products Co (003920 KS)

KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations

There could be 37 migrations for the KOSPI Size indices in March, plus 1 LargeCap and 3 MidCap inclusions. The MidCap to LargeCap migrations have...

Brian Freitas

Namyang Dairy Products: Long Legal Dispute to Be Finally Decided by Supreme Court in January 2024

The Korean Supreme Court's ruling on the stock transfer lawsuit between Hahn & Company private equity fund and Namyang Dairy's Chairman Hong Won...

Douglas Kim

KOSPI Size Indices: Global Index Selling Leads to Potential Downward Migration

There could be 29 migrations for the KOSPI Size indices in March, plus 1 LargeCap and 1 MidCap inclusion. The MidCap to LargeCap migrations have...

Brian Freitas

KOSPI Size Indices - The Outperformance Continues

We see 34 migrations and 6 new inclusions for the KOSPI Size indices. Stocks migrating higher have outperformed stocks migrating lower. Some stocks...

Brian Freitas

Korea Small Cap Gem #9: Namyang Dairy Products - Chairman Sells & Minority Shareholders Cheer

Chairman Hong sold the controlling stake of Namyang Dairy to Hahn & Co. Over the next 2-3 years, we believe Namyang Dairy Products' shares could...

Douglas Kim

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