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>The FnGuide Top 10 (TIGER ETF) currently has an AUM of ₩1.18T, and the next rebalancing will be on June 13, and the rebalancing trading on June 10.</li>
<li>If we perform the screening based on the current stock prices and the FnGuide-concluded index float rates, the possibility that Shinhan Financial will replace Celltrion is relatively high.</li>
<li>If Shinhan replaces Celltrion, the passive flow size seems more significant than the previous rebalancing. Shinhan will face a passive inflow of 1.17x ADTV, while Celltrion will face -0.61x ADTV.</li>
</ul>


The FnGuide Top 10 (TIGER ETF) currently has an AUM of ₩1.18T, and the next rebalancing will be on June 13, and the rebalancing trading on June 10.
If we perform the screening based on the current stock prices and the FnGuide-concluded index float rates, the possibility that Shinhan Financial will replace Celltrion is relatively high.
If Shinhan replaces Celltrion, the passive flow size seems more significant than the previous rebalancing. Shinhan will face a passive inflow of 1.17x ADTV, while Celltrion will face -0.61x ADTV.


FnGuide Top 10 (TIGER ETF) Rebalancing Preview: Shinhan Financial IN & Celltrion OUT

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>The war in Ukraine has been driving up the share prices of Korean steel producers including Posco (005490 KS), Hyundai Steel (004020 KS), and KG Dongbusteel Co., Ltd. (016380 KS).</li>
<li>On 20 March, the Azovstal steel plant, which is owned by Ukrainian steel and mining group Metinvest, was badly damaged by Russian shelling.</li>
<li>The war in Ukraine has resulted in reducing the steel supply in Ukraine and raising the steel prices globally. Korean steel producers have been key beneficiaries of these events.</li>
</ul>


The war in Ukraine has been driving up the share prices of Korean steel producers including Posco (005490 KS), Hyundai Steel (004020 KS), and KG Dongbusteel Co., Ltd. (016380 KS).
On 20 March, the Azovstal steel plant, which is owned by Ukrainian steel and mining group Metinvest, was badly damaged by Russian shelling.
The war in Ukraine has resulted in reducing the steel supply in Ukraine and raising the steel prices globally. Korean steel producers have been key beneficiaries of these events.


War in Ukraine Is Driving Up Share Prices of Korean Steel Producers

<ul>
<li>In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals made by the senior leaders at Korea Corporate Governance Forum and Uprise Co. (Heybit). </li>
<li>We think that the Save KOSPI campaign is an interesting movement that is worth paying attention since it appears to be gaining increasing traction among retail investors in Korea.</li>
<li>As more of these eight proposals are made into law in the next several years, we believe that the 'Korea Discount' could also decline as well.</li>
</ul>


In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals made by the senior leaders at Korea Corporate Governance Forum and Uprise Co. (Heybit). 
We think that the Save KOSPI campaign is an interesting movement that is worth paying attention since it appears to be gaining increasing traction among retail investors in Korea.
As more of these eight proposals are made into law in the next several years, we believe that the 'Korea Discount' could also decline as well.


<ul>
<li>We can consider three types of dividend stocks, targeting the March 31 dividend base date: 1. 1Q fiscal year-ending dividends, 2. Interim (quarterly) dividends, 3. REITs regular dividends</li>
<li>The ex-dividend price corrections of fiscal year-ending dividend stocks have been pretty tight recently. In addition, the futures basis has not reached a desirable level either.</li>
<li>So, either outright dividend trading or dividend arb play does not have much trade opening. So, I'd consider setting up a long/short basket trading, by focusing on high DTV ones.</li>
</ul>


We can consider three types of dividend stocks, targeting the March 31 dividend base date: 1. 1Q fiscal year-ending dividends, 2. Interim (quarterly) dividends, 3. REITs regular dividends
The ex-dividend price corrections of fiscal year-ending dividend stocks have been pretty tight recently. In addition, the futures basis has not reached a desirable level either.
So, either outright dividend trading or dividend arb play does not have much trade opening. So, I'd consider setting up a long/short basket trading, by focusing on high DTV ones.


KOSPI/KOSDAQ End-March Dividends: 1Q Fiscal Year-Ending, Interim(Quarterly), & REITs

<ul>
<li>The KFSC officially unveiled revisions to the guidelines on corporate governance disclosure. The key to these revisions is to regulate the equity carve-out (ECO).</li>
<li>These protection measures may include granting PREEMPTIVE or/and APPRAISAL rights to the parent company shareholders in a post-ECO listing.
</li>
<li>There will be high potential for short-term momentum for POSCO, which has already decided ECO, and SK Innovation (SK On), whose post-ECO listing is practically a foregone conclusion.</li>
</ul>


The KFSC officially unveiled revisions to the guidelines on corporate governance disclosure. The key to these revisions is to regulate the equity carve-out (ECO).
These protection measures may include granting PREEMPTIVE or/and APPRAISAL rights to the parent company shareholders in a post-ECO listing.

There will be high potential for short-term momentum for POSCO, which has already decided ECO, and SK Innovation (SK On), whose post-ECO listing is practically a foregone conclusion.


Preemptive/Appraisal Rights to Parent Company Shareholders in ECO Listing 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.

Price Gauge
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Posco ADR (PKX US)

FnGuide Top 10 (TIGER ETF) Rebalancing Preview: Shinhan Financial IN & Celltrion OUT

This post previews the semi-annual rebalancing of the FnGuide Top 10 Theme Index (TIGER ETF), which will occur on June 10.

Sanghyun Park

What Is the 'Save KOSPI' Campaign?

In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals aimed at improving the corporate governance of Korean...

Douglas Kim

KOSPI/KOSDAQ End-March Dividends: 1Q Fiscal Year-Ending, Interim(Quarterly), & REITs

This post offers the latest update on the expected dividends and dividend yields of the three types of end-1Q dividend stocks.

Sanghyun Park

Preemptive/Appraisal Rights to Parent Company Shareholders in ECO Listing in Korea

The KFSC unveiled revisions to the corporate governance disclosure. The key is to regulate the equity carve-out, specifically granting preemptive...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

FnGuide Top 10 (TIGER ETF) Rebalancing Preview: Shinhan Financial IN & Celltrion OUT

This post previews the semi-annual rebalancing of the FnGuide Top 10 Theme Index (TIGER ETF), which will occur on June 10.

Sanghyun Park

War in Ukraine Is Driving Up Share Prices of Korean Steel Producers

The war in Ukraine has resulted in reducing the steel supply in Ukraine and raising the steel prices globally. Korean steel producers including...

Douglas Kim

What Is the 'Save KOSPI' Campaign?

In this insight, we discuss the 'Save KOSPI' campaign which is a set of eight proposals aimed at improving the corporate governance of Korean...

Douglas Kim

KOSPI/KOSDAQ End-March Dividends: 1Q Fiscal Year-Ending, Interim(Quarterly), & REITs

This post offers the latest update on the expected dividends and dividend yields of the three types of end-1Q dividend stocks.

Sanghyun Park

Preemptive/Appraisal Rights to Parent Company Shareholders in ECO Listing in Korea

The KFSC unveiled revisions to the corporate governance disclosure. The key is to regulate the equity carve-out, specifically granting preemptive...

Sanghyun Park