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>Despite feedback from ETF managers, KRX is moving forward with the simultaneous listing of 12 ETFs tracking the Value-Up Index on November 4th.</li>
<li>Government-Backed organizations are launching a 200 billion KRW Value-Up Fund for the Value-Up Index stocks, targeting an AUM boost to over 1 trillion KRW by year-end.</li>
<li>For new additions in the December rebalancing, the safest bets are POSCO Holdings, JB Financial Group, and HK inno.N.</li>
</ul>


Despite feedback from ETF managers, KRX is moving forward with the simultaneous listing of 12 ETFs tracking the Value-Up Index on November 4th.
Government-Backed organizations are launching a 200 billion KRW Value-Up Fund for the Value-Up Index stocks, targeting an AUM boost to over 1 trillion KRW by year-end.
For new additions in the December rebalancing, the safest bets are POSCO Holdings, JB Financial Group, and HK inno.N.


KRX's Final Call on Value-Up ETF Launch & December Rebalancing Preview

<ul>
<li>Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.</li>
<li>POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.</li>
<li>Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.</li>
</ul>


Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.
POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.
Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.


POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024. </li>
<li>In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently. </li>
<li>However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.</li>
</ul>


On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024. 
In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently. 
However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.


POSCO Group Corporate Value Pre-Announcements: Trading Angle

<ul>
<li>Today's surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.</li>
<li>But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.</li>
<li>Today's price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.</li>
</ul>


Today's surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.
But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.
Today's price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.


Today's Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks

<ul>
<li>Trading opportunities arise when overseas traders' SSF positions face unwinding by local market makers, who enter SSF positions and take opposing spot positions, unwinding at expiry.</li>
<li>August-Expiry SSF data shows reverse flow impact by local market makers today, with varying degrees of impact per stock but an observable overall trend.</li>
<li>With ongoing market volatility in Korea, consider setups targeting price impacts from reverse flows of sector pairs trading on the next SSF expiration date.</li>
</ul>


Trading opportunities arise when overseas traders' SSF positions face unwinding by local market makers, who enter SSF positions and take opposing spot positions, unwinding at expiry.
August-Expiry SSF data shows reverse flow impact by local market makers today, with varying degrees of impact per stock but an observable overall trend.
With ongoing market volatility in Korea, consider setups targeting price impacts from reverse flows of sector pairs trading on the next SSF expiration date.


Trading Opportunities from the Rise of Sector Pairs Trading Using SSFs & MM Unwinding at Expiry

South Korea

POSCO Holdings Inc. manufactures and distributes steel products. The Company produces crude steel, hot rolled steel, cold rolled steel, stainless steel, steel plates, wire rods, galvanized steel, electrical steel, and other related products. POSCO Holdings markets its products worldwide.

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POSCO Holdings (005490 KS)

KRX's Final Call on Value-Up ETF Launch & December Rebalancing Preview

KRX made the final call on the Korea Value-Up ETF launch date, which is November 4th. This post also offers a sneak peek at the December...

Sanghyun Park

POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

This post updates POSCO Holdings' early repayment of ₩1.5T EBs and explores potential pivot trading opportunities following the value-up wave.

Sanghyun Park

POSCO Group Corporate Value Pre-Announcements: Trading Angle

There could be some interesting trading angles for POSCO Holdings, POSCO Future M, and POSCO International in the next several months, ahead of the...

Douglas Kim

Today's Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks

This post explores the potential for sector pair trading opportunities suggested by today's rally in the Korean battery sector.

Sanghyun Park

Trading Opportunities from the Rise of Sector Pairs Trading Using SSFs & MM Unwinding at Expiry

This post explores trading opportunities from the rise of sector pairs trading using single-stock futures and market makers unwinding at expiry.

Sanghyun Park

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