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

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/mirae-asset-tiger-top-10-etf" target="_blank" data-smartkarma-citation="entities:36042:1" rel="noopener">Mirae Asset Tiger Top 10 ETF (292150 KS)</a> tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.</li>
<li>We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.</li>
<li>The trade has performed well historically with positive performance till implementation followed by reversion post implementation.</li>
</ul>


The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$1.2bn.
We currently forecast two potential changes at the next rebalance in June - one change is high probability while one could change depending on price moves over the next week.
The trade has performed well historically with positive performance till implementation followed by reversion post implementation.


FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>On 16 May, it was reported that the Korean financial regulators have approved DGB Daegu Bank to become the 7th commercial bank in Korea. </li>
<li>DGB Daegu Bank is the core entity of DGB Financial Group (139130 KS) which currently has a market cap of 1.4 trillion won (US$1.0 billion).</li>
<li>This change will allow the company to expand in the more lucrative metropolitan Seoul and other regions in Korea. We have a positive view of DGB Financial Group (139130 KS).</li>
</ul>


On 16 May, it was reported that the Korean financial regulators have approved DGB Daegu Bank to become the 7th commercial bank in Korea. 
DGB Daegu Bank is the core entity of DGB Financial Group (139130 KS) which currently has a market cap of 1.4 trillion won (US$1.0 billion).
This change will allow the company to expand in the more lucrative metropolitan Seoul and other regions in Korea. We have a positive view of DGB Financial Group (139130 KS).


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.

<ul>
<li>Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.</li>
<li>Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.</li>
<li>Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.</li>
</ul>


Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.


Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

Cross Asset Strategy

<ul>
<li>Some of the Corporate Value Up program's initial guidelines proposed by the Financial Services Commission (FSC) were announced today.</li>
<li>Overall, the initial guidelines were <strong>disappointing</strong> mainly because they lacked concrete figures with regards to tax incentives for companies that make significant improvements to their corporate governance.</li>
<li>More concrete measures announced today included recommendations for overlapping parent company listing (split listing) and disclosure recommendations for the majority shareholder's profit transfer to an unlisted private company (tunneling).</li>
</ul>


Some of the Corporate Value Up program's initial guidelines proposed by the Financial Services Commission (FSC) were announced today.
Overall, the initial guidelines were disappointing mainly because they lacked concrete figures with regards to tax incentives for companies that make significant improvements to their corporate governance.
More concrete measures announced today included recommendations for overlapping parent company listing (split listing) and disclosure recommendations for the majority shareholder's profit transfer to an unlisted private company (tunneling).


Corporate Value Up Program Guidelines Proposed by the FSC - Disappointing & Needs Improvement

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

Samsung Electronics / Equity Capital Markets

<ul>
<li>KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of  Samsung Electronics (005930 KS).</li>
<li>The deal appears to be somewhat well flagged and the company recently reported better operating numbers for 1Q24.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>


KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of  Samsung Electronics (005930 KS).
The deal appears to be somewhat well flagged and the company recently reported better operating numbers for 1Q24.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Samsung Electronics Placement - Better Timing This Time Around

South Korea

Shinhan Financial Group Co., Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.  The company's main businesses include banking, securities brokerage, trust banking, and assets management to individuals, businesses, and other financial institutions.

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Shinhan Financial (055550 KS)

FnGuide Top10 Index Rebalance Preview: Two Changes Possible in June

There could be two changes for the FnGuide Top 10 Index in June. Historically, the adds have outperformed the deletes pre-implementation and there...

Brian Freitas

Asian Dividend Gems: DGB Financial Group

On 16 May, it was reported that FSC has approved DGB Daegu Bank to become the 7th commercial bank in Korea. This change will allow DGB to expand in...

Douglas Kim

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

This post highlights an upcoming flow trading event on June 14th, stemming from the annual rebalancing of Korea's two largest sector ETFs.

Sanghyun Park

Corporate Value Up Program Guidelines Proposed by the FSC - Disappointing & Needs Improvement

Some of the Corporate Value Up program's initial guidelines proposed by the Financial Services Commission (FSC) were announced today. Overall, the...

Douglas Kim

Samsung Electronics Placement - Better Timing This Time Around

KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of Samsung Electronics (005930 KS).

Sumeet Singh

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