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 possibility of SKC securing additional shares other than the planned 40% through a tender offer seems low. This is a basis for the recent short position build-up in ISC.</li>
<li>ISC began to experience an influx of short selling, leading to it being designated as an overheated short-selling stock, and short selling was restricted for one day on the 26th.</li>
<li>We need to pay attention to the potential disappointment in the market, which could lead to a sustained downward correction in the stock price.</li>
</ul>


The possibility of SKC securing additional shares other than the planned 40% through a tender offer seems low. This is a basis for the recent short position build-up in ISC.
ISC began to experience an influx of short selling, leading to it being designated as an overheated short-selling stock, and short selling was restricted for one day on the 26th.
We need to pay attention to the potential disappointment in the market, which could lead to a sustained downward correction in the stock price.


ISC's Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

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 September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.</li>
<li>There are potential changes to some of the indices and then there are close changes that will result in big flows if they eventuate.</li>
<li>The March rebalance saw some funky moves on the stocks that had big flows and we could see more of that at the September rebalance.</li>
</ul>


The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
There are potential changes to some of the indices and then there are close changes that will result in big flows if they eventuate.
The March rebalance saw some funky moves on the stocks that had big flows and we could see more of that at the September rebalance.


KRX New Deal Index Rebalance Preview: Potential & Close Changes in September

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

Solus Advanced Materials / Equity Bottom-Up

<ul>
<li>We believe the following three catalysts will likely drive share price of Solus Advanced Materials' continued outperformance relative to the market this year. </li>
<li>They include the sale of Solus Biotech, improved control of its operating costs, and rapid increase in capacity for copper foil.</li>
<li>The company has already secured strong order backlog from customers including LG Energy Solution, Tesla Motors, and SK On.</li>
</ul>


We believe the following three catalysts will likely drive share price of Solus Advanced Materials' continued outperformance relative to the market this year. 
They include the sale of Solus Biotech, improved control of its operating costs, and rapid increase in capacity for copper foil.
The company has already secured strong order backlog from customers including LG Energy Solution, Tesla Motors, and SK On.


Solus Advanced Materials: Key Catalysts to Continue Its Outperformance in 2023

Global X Lithium & Battery Tech ETF / Event-Driven

<ul>
<li>LG Energy Solution and Samsung SDI will remain in the index as top stocks of pack makers, respectively. Ecopro BM will almost certainly replace L&amp;F in the category of Cathode.</li>
<li>SK IE Technology will newly join the index with Separator's top stock. On the other hand, Lotte Energy Materials and SKC are unlikely to be included.</li>
<li>This event can be a critical inflection point in predicting the counter-flow for short positions against Ecopro BM and L&amp;F in advance.</li>
</ul>


LG Energy Solution and Samsung SDI will remain in the index as top stocks of pack makers, respectively. Ecopro BM will almost certainly replace L&amp;F in the category of Cathode.
SK IE Technology will newly join the index with Separator's top stock. On the other hand, Lotte Energy Materials and SKC are unlikely to be included.
This event can be a critical inflection point in predicting the counter-flow for short positions against Ecopro BM and L&amp;F in advance.


Pre-Positioning Targeting Solactive Global Lithium Index's October Rebalancing

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<ul>
<li>TSMC's revenue could drop in the near-term due to customers cutting orders, however full year 2023E growth still likely thanks to advanced chips.</li>
<li>Samsung has guided staff internally for a major slump in its semiconductor unit's operating profit.</li>
<li>Apple is pushing for price cuts amongst its suppliers due to weak end demand for its products.</li>
</ul>


TSMC's revenue could drop in the near-term due to customers cutting orders, however full year 2023E growth still likely thanks to advanced chips.
Samsung has guided staff internally for a major slump in its semiconductor unit's operating profit.
Apple is pushing for price cuts amongst its suppliers due to weak end demand for its products.


Taiwan Tech Weekly: Signs TSMC Winning the 3-Nm Battle Vs. Samsung, Apple Bargaining Down Suppliers

South Korea

SKC Co., Ltd. manufactures a variety of films, including polyester films, silicon coated films, and inkjet films.  The Company also produces chemical products, such as propylene oxide, propylene glycol, and styrene monomer. In addition, SKC provides materials for photovoltaic.

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SKC Co Ltd (011790 KS)

ISC's Tender Offer Possibility Is Decreasing, Indicating a Potential Shorting Opportunity

There seems to be a decrease in the likelihood of a tender offer to minority shareholders for ISC, which could present a potential shorting...

Sanghyun Park

KRX New Deal Index Rebalance Preview: Potential & Close Changes in September

There were big moves on stocks that were changes at the March rebalance. We take a look at expected and close changes at the September rebalance....

Brian Freitas

Solus Advanced Materials: Key Catalysts to Continue Its Outperformance in 2023

In this insight, we discuss the three main catalysts that will likely drive Solus Advanced Materials' stock price continuing to outperform relative...

Douglas Kim

Pre-Positioning Targeting Solactive Global Lithium Index's October Rebalancing

This post investigates several pre-positioning angles for passive flow trading and counter-attack flow against short positions with Solactive...

Sanghyun Park

Taiwan Tech Weekly: Signs TSMC Winning the 3-Nm Battle Vs. Samsung, Apple Bargaining Down Suppliers

TSMC's revenue could drop in the near-term due to customers cutting orders, however full year 2023E growth still likely thanks to advanced chips.

Vincent Fernando, CFA

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52-week Range

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