Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>POSCO Holdings (005490 KS) announced a major shareholder return policy to buyback and cancel nearly 2 trillion won worth of treasury shares from 2024 to 2026. </li>
<li>The company will cancel 5.25 million treasury shares representing 6.2% of outstanding shares (about 1.9 trillion won). It will also repurchase and cancel additional 100 billion won of shares.</li>
<li><em><strong>POSCO Holdings has taken a major initiative to provide greater returns to its shareholders and this should have a positive impact on its share price. </strong></em></li>
</ul>


POSCO Holdings (005490 KS) announced a major shareholder return policy to buyback and cancel nearly 2 trillion won worth of treasury shares from 2024 to 2026. 
The company will cancel 5.25 million treasury shares representing 6.2% of outstanding shares (about 1.9 trillion won). It will also repurchase and cancel additional 100 billion won of shares.
POSCO Holdings has taken a major initiative to provide greater returns to its shareholders and this should have a positive impact on its share price. 


POSCO Holdings: Announces Shares Buyback and Cancellation of Nearly 2 Trillion Won

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>Prices for Neon have been rising rapidly recently, in the short term, global semiconductor companies have 6 months inventory of the noble gas.</li>
<li>China, as a major steel producer, has mature purification technology and production process for these noble gases,  around 30% of noble gases for wafers above 8-inch  are Chinese suppliers. </li>
<li>It takes 3 to 6 months to find replacement due to the complex process of chip lithography; this crisis will accelerate the domestic substitution  of Chinese semiconductor material manufacturers.</li>
</ul>


Prices for Neon have been rising rapidly recently, in the short term, global semiconductor companies have 6 months inventory of the noble gas.
China, as a major steel producer, has mature purification technology and production process for these noble gases,  around 30% of noble gases for wafers above 8-inch  are Chinese suppliers. 
It takes 3 to 6 months to find replacement due to the complex process of chip lithography; this crisis will accelerate the domestic substitution  of Chinese semiconductor material manufacturers.


How Semiconductor Supply Chain in China Stands to Benefit from Ukraine Crisis

Cross Asset Strategy

<ul>
<li>There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. </li>
<li>In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.</li>
<li>There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).</li>
</ul>


There are some major surprises (both inclusions and exclusions) in the Korea Value Up index. 
In particular, the telecom sector (SK Telecom and KT) and large cap holding companies (Samsung C&amp;T and LG Corp) are surprising exclusions in the index.
There are many surprising inclusions in the Korea Value Up Index. We provide 30 companies are surprising inclusions in the Korea Value Up Index (19 KOSDAQ and 11 KOSPI listed).


Korea Value Up Index - Surprising Inclusions and Exclusions

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>Following the short sell ban announced on the weekend, the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> opened higher on Monday and rallied through the day.</li>
<li>A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.</li>
<li>Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.</li>
</ul>


Following the short sell ban announced on the weekend, the KOSPI 200 and KOSDAQ 150 opened higher on Monday and rallied through the day.
A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.
Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.


Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Korea banned all short selling in March 2020 and resumed short selling only on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> index constituents in May 2021.</li>
<li>News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.</li>
<li>There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.</li>
</ul>


Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.


Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

South Korea

POSCO manufactures various types of steel products.  The Company produces hot rolled steel, cold rolled steel, stainless steel, and other forms of steel. The products are mainly used for automobile, construction, and shipbuilding industries.

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Posco ADR (PKX US)

POSCO Holdings: Announces Shares Buyback and Cancellation of Nearly 2 Trillion Won

POSCO Holdings (005490 KS) announced a major shareholder return policy to buyback and cancel nearly 2 trillion won worth of treasury shares from...

Douglas Kim

How Semiconductor Supply Chain in China Stands to Benefit from Ukraine Crisis

As the Ukraine standoff intensifies, a little-known industry is set for an upset, leaving western buyers in a lurch and Chinese producers...

Evelyn Zhang

Korea Value Up Index - Surprising Inclusions and Exclusions

There are many surprising inclusions and exclusions in the Korea Value Up Index. We provide 30 companies that are surprising inclusions and 10...

Douglas Kim

Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

Not a lot of shorts were covered on Monday. There could be more covering in the near term as the market drifts lower. KOSPI200 underperformed...

Brian Freitas

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Media reports indicate that there could be a temporary short sell ban in Korea. This could lead to futures backwardation, market manipulation and a...

Brian Freitas

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