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>KRX approved the listing of ACE POSCO Group Focus. This fund mirrors the performance of the FnGuide POSCO Group Focus Index. KRX will announce the listing date next week.</li>
<li>This index encompasses 6 Posco affiliates and 4 non-Posco stocks. The top 3 constituents, each assigned a 25% weight, are POSCO Holdings, Posco International, and Posco Future M.</li>
<li>We should explore various long-short setups for stocks within the local battery sector (long Posco affiliates and short others), starting with the listing of this ACE POSCO Group Focus ETF.</li>
</ul>


KRX approved the listing of ACE POSCO Group Focus. This fund mirrors the performance of the FnGuide POSCO Group Focus Index. KRX will announce the listing date next week.
This index encompasses 6 Posco affiliates and 4 non-Posco stocks. The top 3 constituents, each assigned a 25% weight, are POSCO Holdings, Posco International, and Posco Future M.
We should explore various long-short setups for stocks within the local battery sector (long Posco affiliates and short others), starting with the listing of this ACE POSCO Group Focus ETF.


Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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.

Equity Capital Markets

EcoPro Materials / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ecopro-materials" target="_blank" data-smartkarma-citation="entities:36806:1" rel="noopener">EcoPro Materials (ECO123 KS)</a> is looking to raise up to US$500m in its Korean IPO.</li>
<li>Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.</li>
<li>In our previous note, we covered the company’s performance. In this note, we will undertake a  peer comparison.</li>
</ul>



EcoPro Materials (ECO123 KS) is looking to raise up to US$500m in its Korean IPO.
Ecopro Materials (EPM) manufactures and sells high-nickel precursors, one of the key materials for high-nickel cathode materials for secondary (rechargeable) batteries.
In our previous note, we covered the company’s performance. In this note, we will undertake a  peer comparison.


Ecopro Materials IPO - Peer Comparison - Doesn't Particularly Stand Out

<ul>
<li>The trigger for yesterday's sell-off was the sudden collective decision of the brokerages that had been allowing credit trading for these stocks to halt credit trading simultaneously.</li>
<li>There is a possibility that the identities of the stocks under investigation were leaked, and these brokerages took preemptive actions.</li>
<li>There have also been observations of large-cap stocks that may become the next targets. Some notable examples include Cosmo Chemical, Kum Yang, Posco International, and Ecopro Co.</li>
</ul>


The trigger for yesterday's sell-off was the sudden collective decision of the brokerages that had been allowing credit trading for these stocks to halt credit trading simultaneously.
There is a possibility that the identities of the stocks under investigation were leaked, and these brokerages took preemptive actions.
There have also been observations of large-cap stocks that may become the next targets. Some notable examples include Cosmo Chemical, Kum Yang, Posco International, and Ecopro Co.


Market Talk on the Five Stocks Hitting the Lower Limit Yesterday

<ul>
<li>Once again, the profit from Long Short basket trading has also been significant this time. The returns were quite juicy even if the period is shortened to From-February. </li>
<li>The critical question now is whether the juice remains until the effective date. From what I can see, there is still some juice left.</li>
<li>This is because it is generally observed that the flow trading window for this event tends to continue beyond the effective date.</li>
</ul>


Once again, the profit from Long Short basket trading has also been significant this time. The returns were quite juicy even if the period is shortened to From-February. 
The critical question now is whether the juice remains until the effective date. From what I can see, there is still some juice left.
This is because it is generally observed that the flow trading window for this event tends to continue beyond the effective date.


KOSPI Size Indexes Migrants: Official Results & Price Performances So Far

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>The review period for the March rebalance of the KOSPI Size Indices ends 28 February. The results will be announced early March and implemented at the close on 9 March.</li>
<li>We see 5 migrations between MidCap and LargeCap, 8 migrations from SmallCap to MidCap, 3 new adds to MidCap, and 11 migrations from MidCap to SmallCap.</li>
<li>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 ends 28 February. The results will be announced early March and implemented at the close on 9 March.
We see 5 migrations between MidCap and LargeCap, 8 migrations from SmallCap to MidCap, 3 new adds to MidCap, and 11 migrations from MidCap to SmallCap.
Stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.


KOSPI Size Indices - Potential Changes in March

South Korea

Posco International Corporation is a general trading company.  The Company exports and imports steel, cement, crude oil, heavy machinery, automobile parts, and textiles.  Daewoo also manufactures synthetic fabrics for footwear, garments, and car seats, and operates a department store in Masan.

Posco International Corporation (047050 KS)

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Posco International Corporation (047050 KS)

Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights

This post explores the launch of a Posco Group-focused ETF, which will likely debut around mid-this month, and its implications from a flow trading...

Sanghyun Park

Ecopro Materials IPO - Peer Comparison - Doesn't Particularly Stand Out

EcoPro Materials (ECO123 KS) is looking to raise up to US$500m in its Korean IPO. In our previous note, we covered the company’s performance. In...

Ethan Aw

Market Talk on the Five Stocks Hitting the Lower Limit Yesterday

This post examines the major issues that have garnered significant attention based on the information available so far regarding the incident of...

Sanghyun Park

KOSPI Size Indexes Migrants: Official Results & Price Performances So Far

KRX announced the official results of the KOPSI Size Indexes migration for the March rebalancing. This post offers key takeaways and trading...

Sanghyun Park

KOSPI Size Indices - Potential Changes in March

The review period for the March rebal of the KOSPI Size Indices ends on 28 February. We see quite a lot of potential migrations. Some stocks could...

Brian Freitas

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52-week Range

Market Cap (USDm)

P/E

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