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>KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.</li>
<li>Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.</li>
<li>Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.</li>
</ul>


KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.
Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.
Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.


HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

<ul>
<li>
 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.</li>
<li>Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.</li>
<li>These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.</li>
</ul>



 Kakao managed to stay out of the relegation zone. Instead, Kia was pushed to the borderline. But POSCO failed to up its float rate, so Kia stayed in.
Besides that, LG Energy Solution and Celltrion made it to the index, replacing KB Financial and Shinhan Financial.
These passive flows appears to be of sufficient magnitude to cause a substantial price impact on T-1 Effectiveness. But it should also be approached with a fairly short window.


TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

<ul>
<li>There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.</li>
<li>Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.</li>
<li>LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.</li>
</ul>


There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.
Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.
LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.


TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>KRX plans to launch KRX/S&amp;P ESG High Dividends Index on 4 October. This index will be composed of stocks in KOSPI 200 which have high dividend yields and ESG scores.</li>
<li>We provided a list of 20 stocks in KOSPI with high dividend yields with at least 500 billion won in market cap and those that have higher ESG scores.</li>
<li>Amid a major downturn in the global stock markets, there is a greater emphasis on the preservation of capital and increasing capital allocation to higher dividend yielding stocks.</li>
</ul>


KRX plans to launch KRX/S&amp;P ESG High Dividends Index on 4 October. This index will be composed of stocks in KOSPI 200 which have high dividend yields and ESG scores.
We provided a list of 20 stocks in KOSPI with high dividend yields with at least 500 billion won in market cap and those that have higher ESG scores.
Amid a major downturn in the global stock markets, there is a greater emphasis on the preservation of capital and increasing capital allocation to higher dividend yielding stocks.


Launch of KRX/S&P ESG High Dividends Index

<ul>
<li>Juice for cash &amp; carry arbitrage doesn't seem like much. Several names in contango, but the basis widening isn't at a sufficiently arb-tradable level.</li>
<li>Reverse cash &amp; carry isn't all that attractive either, but it certainly does offer more juice, even with borrow fees. Ssangyong C&amp;E, SKT, Shinhan, and KB deserve our attention.</li>
<li>A bit uncertain is whether the pattern of "LONG Spot until ex-dividend and Conversion to Short" through cash &amp; carry will repeat itself this time.</li>
</ul>


Juice for cash &amp; carry arbitrage doesn't seem like much. Several names in contango, but the basis widening isn't at a sufficiently arb-tradable level.
Reverse cash &amp; carry isn't all that attractive either, but it certainly does offer more juice, even with borrow fees. Ssangyong C&amp;E, SKT, Shinhan, and KB deserve our attention.
A bit uncertain is whether the pattern of "LONG Spot until ex-dividend and Conversion to Short" through cash &amp; carry will repeat itself this time.


3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea

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)

HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force

This post investigates KDB's HMM stake sale reportedly initiated last week and discusses the possibility that this deal will be the first to be...

Sanghyun Park

TIGER Top 10 Rebalancing: Four Names to Trade on T-1 Effective

This post screens four names to trade at the TIGER Top 10 ETF rebalancing in December based on FnGuide's latest float rates, and discusses trading...

Sanghyun Park

TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging

This post investigates the current rebalancing status of the TIGER Top 10 ETF, the largest AUM sector ETF in Korea, and previews the resulting...

Sanghyun Park

Launch of KRX/S&P ESG High Dividends Index

KRX plans to launch KRX/S&P ESG High Dividends Index on 4 October. This index will be composed of stocks in KOSPI 200 which have high dividend...

Douglas Kim

3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea

This post provides the market consensus estimates for the 3Q dividends of those with single-stock futures in Korea and looks into the cash-and...

Sanghyun Park

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