Event-Driven

Lookers disclosed that Cinch (largest shareholder with 19.52% stake) plans to vote against the scheme. The shares have dropped to halfway between the pre-offer price and Alpha Auto’s offer.
The shares are pricing a 45% probability of deal completion. This sector has a track record of failed deals, so it is understandable that investors are spooked.
Top Lookers shareholders are keen on selling and an offer from Lithia could well happen. At around 103p I’d be long, as I consider the risk reward is balanced.

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Jul 21

Daily Brief Event-Driven: Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics
Lasertec (6920) – The State of Things May Be Different Than You Think
Quiddity Primer for CSI 300/500 Index Rebalance Events

Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics

Insiders holding more than 10% of SO must disclose block deals 30 days in advance if they plan to sell more than 1% of SO or an amount exceeding ₩5B.
The trading window and pricing range for short positions, based on the assumption of deal-taking, will likely vary significantly as the timing of price reflection will see a drastic change.
There is an increasing likelihood that major shareholders will accelerate their planned block deals and bring them to the market in abundance before October.

Lasertec (6920) – The State of Things May Be Different Than You Think

Lasertec (6920) is a shoo-in for Nikkei 225 inclusion in September according to the quantitative analysis. The amount to buy is a small multiple of ADV, making the inclusion “unimpressive.”
It is probably worth looking at the details of ownership, of volume, and of relationship to other stocks in the same general sector.
It is also worth thinking about flow channels (stock up or down changes flows) and forward fundamental calculations.

Quiddity Primer for CSI 300/500 Index Rebalance Events

CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
During the periodic index rebalance events, a large number of stocks move into or out of these indices giving rise to significant flow events and attractive trading opportunities.
In this insight, we take a brief look at the index selection methodology and the historical price and volume performance of the CSI 300/500 index rebalance baskets.

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Jul 20

Daily Brief Event-Driven: What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations
Quiddity Leaderboard TDIV Sep 23: AUM Assumption Changes Again; SHORTs Down 15.6% Vs Index
Searchlight/Gresham House: Attractive Spread
Essential Metals/Develop Global: Rock Steady With MinRes Support

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing

Yonhap News reported on the exclusive coverage of Ecopro BM and L&F’s KOSPI transfer listing.
L&F announced through the disclosure that they are considering the KOSPI transfer listing. Ecopro BM told another local news outlet that they are not currently reviewing the KOSPI transfer listing.
It seems that L&F’s KOSPI transfer listing is almost a confirmed fact. However, the Ecopro company in question may be Ecopro Co, not Ecopro BM.

Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping

Using data from the close on 19 July, there could be 5 changes to the Yuanta/P-Shares Taiwan Top 50 ETF and 2 deletions for the Yuanta/P-Shares Taiwan Dividend Plus ETF.
Stocks that are expected to benefit from the AI revolution could gain ETF inclusion while shipping stocks are the ones expected to be deleted from the ETF.
There has been a huge increase in shorts on some of the potential inclusions and on most of the potential deletions. That will affect how stocks trade near term.

Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations

In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
Some semiconductor/electronic component stocks have seen their share prices skyrocket in recent months due to AI-related excitement causing drastic shifts in Leaderboard rankings.
In my last insight, I expected two T50 changes and one T100 change. Now I expect five T50 changes and three T100 changes.

Quiddity Leaderboard TDIV Sep 23: AUM Assumption Changes Again; SHORTs Down 15.6% Vs Index

In this insight, we take a look at Quiddity’s flow expectations for the September 2023 index rebalance.
Since my last insight, my estimate for the tracking AUM estimate assumption for September 2023 has increased and has caused changes to my flow expectations.
Separately, the SHORTs suggested in my last insight have underperformed the index by 15.6% in 3 weeks. I have updated my thoughts on that as well.

Searchlight/Gresham House: Attractive Spread

Searchlight agreed to acquire via scheme of arrangement UK asset manager Gresham House PLC (GHE LN) for 1,105p/share in cash, c.£470 million, 12.6x EV/Fwd NTM EBITDA, 17.6x Fwd P/E. Terms are final.
Irrevocables plus letters of intent total 33%. Although the consensus median TP is 1,170p/share (c. 5.8% higher), it seems difficult to argue with a 63% premium.
Taking 680p break, the shares are pricing an 89% probability of completion. Spread is 4.3%/10.3% (gross/annualised), which explains why the shares have been liquid since the offer announcement. Long.

Essential Metals/Develop Global: Rock Steady With MinRes Support

At the 20 April Scheme Meeting, Mineral Resources (MIN AU) (with 19.55%) and other shareholders voted against the Tianqi Lithium JV transaction for Essential Metals (ESS AU).
This left Essential in no man’s land until MinRes (presumably) made a move. But on the 3 July, Develop Global (DVP AU) announced a binding Scheme with ESS.
The all-scrip Scheme transaction has the backing of MinRes, which also owns a ~13% stake in Develop. This deal – this time- looks all stitched up.

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Jul 19

Daily Brief Event-Driven: S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
StubWorld: SZ International’s Logistics Spin-Offs
Ventia Services (VNT) Selected to Join ASX 200 – Not A Surprise
Quiddity Leaderboard ES50 Sep 23: Massive Flows; Might Be Time for LONG Ferrari – SHORT Vonovia
Quiddity Leaderboard SE600 Sep 23: CD Projekt Could Become an Intra-Review ADD
EQD | Hang Seng Index (HSI) WEEKLY Deep-But-Brief Pullback
Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September

Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.

StubWorld: SZ International’s Logistics Spin-Offs

Shenzhen International (152 HK) seeks to spin off logistic assets on a PRC exchange; and 51.56%-held Shenzhen Expressway Co H (548 HK) intends to place out A shares.
Preceding my comments on SZ Int’l/SZ E’Way are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Ventia Services (VNT) Selected to Join ASX 200 – Not A Surprise

After the Blackmores Ltd (BKL AU) Scheme Meeting result was announced earlier today, post-close the S&P/ASX team announced Ventia (VNT AU) would replace it on 21 July at the close.
This is not that surprising. Janaghan Jeyakumar, CFA expected it in June, and it was a super-close second recently for him for the Sep rebalance.
Given the shareholder structure and flow dynamics, it’s worth taking a closer look.

Quiddity Leaderboard ES50 Sep 23: Massive Flows; Might Be Time for LONG Ferrari – SHORT Vonovia

The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
As ES50 index changes generally involve large cap names, these Rebalance events have historically had significant volume and ADV impact.
In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2023.

Quiddity Leaderboard SE600 Sep 23: CD Projekt Could Become an Intra-Review ADD

In this insight, we take a look at the names leading the race to become ADDs/DELs for the SE600 and EURSTX Indices for the September 2023 Rebalance.
SimCorp A/S (SIM DC) could trigger an intra-review ADD prior to the September 2023 Rebalance.
Apart from that, I expect four other changes during the regular rebalance in September 2023. These expected ADDs and DELs are different from those in my last insight.

EQD | Hang Seng Index (HSI) WEEKLY Deep-But-Brief Pullback

The Hong Kong Hang Seng Index (HSI) last week closed strongly up. This week it’s pulling back, but MRM pattern readings forecast a very short-lived pullback (-1 to -2 weeks).
The suggested strategy is: let the index play out its pullback (warning: it can be volatile) and then enter LONG trades when the probability is good.
Suggested support price areas are between 18965 (Q2) and 18732 (Q3) – or this Friday at Close (as long as the close is negative).

Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup

Those that the local market is particularly interested in are the 192nd convertible bonds (CB) held by KDB, along with the 193rd bonds with warrants (BW) owned by KOBC.
These two bonds’ call option exercise date is September 25th. Upon conversion of these bonds, 200M new shares will be issued (41% of SO and a 30% dilution).
The key is the trade-off between not disrupting the selling process and avoiding any breach of trust. The prevailing local sentiment suggests that KDB and KOBC will choose stock conversion.

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Jul 18

Daily Brief Event-Driven: Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿
Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors
Keisei Electric: Valuation Distortion Set to Unravel with Fantasy Springs’ Opening in Spring 2024
Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely
Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting
Inflexion/DWF: Compelling Value

Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿

Last year Nidec Corp (6594 JP) approached machine tool maker Takisawa Machine Tool (6121 JP) interested in an integration with their sub. Takisawa said “Talk to the hand.”
Now Nidec – a blue chip (from Kyoto no less, which traditionally abhors hostile activity) – has gone hostile on Takisawa bidding 65-100% depending how you see undisturbed.
Lots of moving parts on this one, but in the end, Retail probably decides this.

Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

One noteworthy aspect is SK Square’s strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.
Given SK’s aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.
We may consider positioning to capitalize on SK Square’s potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.

Keisei Electric: Valuation Distortion Set to Unravel with Fantasy Springs’ Opening in Spring 2024

By Oshadhi Kumarasiri

Since the announcement of the proposed Tokyo Disney Sea expansion in 2015, Keisei Electric Railway Co (9009 JP)‘s price perfromance has significantly diverged from Oriental Land (4661 JP)‘s price performance.
The valuation disparity may result from the Disney Sea expansion’s impact, possibly due to Keisei Electric’s value-oriented investor base.
Fantasy Springs’ opening could resolve the valuation distortion, leading to potential rewards in a Long Keisei Electric and Short Oriental Land trade.

Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely

In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
I currently expect two changes for the F100 index and three changes for the F250 index.
As always, there are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.

Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting

In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
As things stand, I do not see any changes for the DAX index as-is, but there are couple of names requiring only small price gains to trigger Fast Entry changes.
I see one change between MDAX and SDAX and one separate ADD/DEL for the SDAX index in the September 2023 rebalance.

Inflexion/DWF: Compelling Value

DWF Group (DWF LN) is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.
Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.
The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.

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Jul 17

Daily Brief Event-Driven: SK Telecom (017670 KS): Foreign Room Increase Has Implications and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

SK Telecom (017670 KS): Foreign Room Increase Has Implications
Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
Lutronic Tender Offer by Hahn & Company: 2nd Round
Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes
EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?
EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)
Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report

SK Telecom (017670 KS): Foreign Room Increase Has Implications

Foreign investors have been selling SK Telecom (017670 KS) for over a year now. That has taken foreign room from near zero to close to 15% now.
That could mean index inclusion for SK Telecom (017670 KS) with timing dependent on when the 15% foreign room threshold is crossed.
SK Telecom (017670 KS) has performed in line with KT Corp (030200 KS) but trades at higher valuations on most parameters.

Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare

By Arun George

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads 111 Inc (YI US), Chindata Group (CD US), ENM Holdings (128 HK), Estia Health (EHE AU), Poly Culture Group Corp H (3636 HK), Costa Group Holdings (CGC AU).
Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Kenedix Residential Investment (3278 JP), Penguin International (PBS SP), Challenger Technologies (CHLG SP).

Lutronic Tender Offer by Hahn & Company: 2nd Round

By Douglas Kim

According to local media (Seoul Economic Daily), Hahn & Company plans to make a second round of tender offer for Lutronic Corp, in order to meet the delisting requirements.
The tender offer price is 36,700 won, the same as the first tender offer price.
We believe that Hahn & Co is likely to successfully complete this second round of tender offer of Lutronic and it is likely to be delisted in the coming months.

Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes

In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run up to the September 2023 Rebalance.
Blackmores Ltd (BKL AU) could get deleted from the index family, triggering intra-review changes in the next few days.
Including the intra-review changes, ASX 300 could see 12 ADDs and 10 DELs, ASX 200 could see 4 changes, and ASX 100 could see one change between now and September.

EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?

A previously published insight correctly highlighted an high-probability opportunity to go LONG and join the KOSPI 200‘s current multi-month Bull run.
The index closed the week strongly up, now we want to evaluate how far this new leg up could go: a total of +3/+4 weeks up, price targets =359-385.
Holders of KOSPI 200 LONG positions: Covered Calls can be written at Strikes between 346 and 360, expiry August 10th (4 weeks). A pullback is highly probable from 360.

EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)

Nikkei 225 (NKY INDEX) has pulled back from its peak. Direction currently unclear but last week’s positive Close was super weak (+0.1%) , may lead to lower prices this week.
If the index falls this week, a -1 or -2 weeks down is the most common pattern, followed by a rebound. Reversal probability is =75% for -2 weeks down.
Valid support levels for buy-the-dips are between 32067 and 31554. If lower, up to -3 weeks down this pattern is still bullish, from -4 weeks it turns bearish.

Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report

Since mid-June, spreads have generally widened across our liquid universe (10 have widened, 8 widened, 1 at same level).
Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
Recommended trades long preferred / short ordinary shares: Carlsberg, Ericsson, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

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Jul 16

Daily Brief Event-Driven: Index Rebalance & ETF Flow Recap: ASX and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY
Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Summer Lull

Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY

Busy week in India with the adhoc changes to the NIFTY, NSE Nifty Next 50, S&P BSE SENSEX and Nifty Bank due to the HDFC Limited and HDFC Bank merger.
The IDX could announce the changes to the IDX30, LQ45 and IDX80 indices in the coming week, though there is no firm schedule for announcements.
Yet another week of inflows to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF and outflows from the Hang Seng H Share Index ETF (2828 HK).

Last Week in Event SPACE: Celltrion, Fast Retailing, Canon, Costa, Chindata

According to Invest Chosun, Celltrion Inc (068270 KS) plans to submit a merger registration statement to the KRX in July, with Mirae Asset Securities acting as the lead underwriter.
Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.
Canon (7751 JP)‘s most recent buyback should be done now-ish. They have been ~15-20% of volume over the past month. The Trade would be short Canon vs Ricoh (7752 JP).

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Summer Lull

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

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Jul 15

Daily Brief Event-Driven: KRX’s Revised CFD Oversight Guidelines & Ongoing Suspicious Incidents and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

KRX’s Revised CFD Oversight Guidelines & Ongoing Suspicious Incidents

KRX’s Revised CFD Oversight Guidelines & Ongoing Suspicious Incidents

The important point is that the regulations also incorporate a provision mandating the disclosure of the actual end traders’ identities when brokerages engage in CFD transactions disguised as proprietary trading.
Recent suspicious incidents raise concerns because they are carried out through brokerages’ proprietary trading practices, making them relatively more difficult for local regulatory authorities to detect and monitor.
We need to closely monitor the market’s abnormal volatility following the strengthened new rules on CFDs and carefully consider the setup for responding to these changes.

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Jul 14

Daily Brief Event-Driven: Canon (7751) Buyback Almost Done and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket
IMAX China (1970 HK): Parent Privatisation
Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity
IMAX China (1970 HK): IMAX Corp’s Privatisation Offer
Will Hana Financial Acquire KDB Life Insurance?
EQD | S&P/ASX200: Ideas to Profit From a Directionless Market

Canon (7751) Buyback Almost Done, TPX Selldown to Come = Trade Vs Ricoh or Basket

Canon Inc (7751 JP) announced a second buyback this fiscal year on 15 June. As discussed here previously, Canon buybacks are short, sharp, and sweet.
The recent one should be done imminently (15 May start ended 13 July). 16 June start? (Note: Canon reports buyback results at 3pm local time, and did not report today).
This time we have a double-setup with buyback ending and a large TOPIX sell on Canon on 28 July.

IMAX China (1970 HK): Parent Privatisation

This morning (13 July), IMAX China Holding (1970 HK) announced a take-private transaction from its parent IMAX Corp (IMAX US) at HK$10/share.
The Offer price is a 9.65% premium to last close but a 39.47% premium over the closing price on the last full trading day. Evidently, there was news leakage.
IMAX US holds 71.63% in IMAX China, therefore the blocking stake at the Schene Meeting is 2.837% of shares out.

Fast Retailing UPs Forecasts, Which Creates A Sell/Short Opportunity

Fast Retailing (9983 JP) investors are in a conundrum. The stock is doing well. With one quarter to go, the company just raised its full-year EPS target by 8.3%.
It also raised its H2 dividend by 20+% so the full-year div will be more than 20% higher than previously forecast and up 35+% since last year. All good.
Except for the selling. Potentially lots of selling. And more outperformance begets more selling. Then even more selling in 2024. And 2025? What about 2025? More outperformance begets more selling.

IMAX China (1970 HK): IMAX Corp’s Privatisation Offer

By Arun George

IMAX China Holding (1970 HK) disclosed a scheme privatisation offer from IMAX Corp (IMAX US) at HK$10.00 per share, a 39.5% premium to the undisturbed price (HK$7.17 on 10 July).
The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
The offer price is final. While the offer price is light compared to peer multiples and historical share prices, the deal will likely succeed.

Will Hana Financial Acquire KDB Life Insurance?

By Douglas Kim

On 13 July, it was reported in the local media that the Korea Development Bank selected Hana Financial as the preferred bidder for the sale of KDB Life Insurance.
The potential overpaying for KDB Life and the rising delinquency rates of loans by all the major banks in Korea are likely to result in continued underperformance of Hana Financial.
If Hana Financial is able to acquire KDB Life Insurance, this would boost Hana Financial as the 8th largest life insurance company in Korea in terms of asset size.

EQD | S&P/ASX200: Ideas to Profit From a Directionless Market

The S&P/ASX 200 INDEX has been stuck in the 7000-7400 range for the past 16 weeks.
If the index continues to be trendless for some more weeks, it’s possible to profit from repeatedly writing Covered Calls against ASX 200 index holdings.
Strike target areas for Covered Calls begin in the 7319-7409 (July 20 expiry). Deeper OTM Strikes are safe, but the premiums are smaller.

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Jul 13

Daily Brief Event-Driven: July TOPIX FFW Rebal – Bigger Than Expected and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

July TOPIX FFW Rebal – Bigger Than Expected
Korea – A Look at Ecopro, Kumyang & JYP Entertainment
EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade
Industrivärden H1, Discount and Target NAV

July TOPIX FFW Rebal – Bigger Than Expected

Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
Some of these other recent announcements represent a possible change in ad hoc methodology.
Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is > 3 days ADV.

Korea – A Look at Ecopro, Kumyang & JYP Entertainment

We take a look at Ecopro Co Ltd (086520 KS), Kum Yang (001570 KS) and Jyp Entertainment (035900 KS) since they appear to be on investor radars.
Foreign investors have been buyers while retail have been sellers in Ecopro Co and Kum Yang over the last month, while foreign investors have continued to buy Jyp Entertainment.
Short interest on all stocks has dropped over the last month, though there has been a recent tick up in shorts on Jyp Entertainment (035900 KS).

EQD | S&P500 E-Mini (ES) DAILY SHORT, Speculative High-Probability Trade

The S&P500 E-Mini (ES) is approaching a DAILY resistance level at a point in time where it could perform a quick reversal – a SHORT trade opportunity.
Watch the 4483-4525 price area, today is the 3rd consecutive day up, the reversal could begin in that area, today or tomorrow.
The probability for a quick reversal, after 3 days up, in the 4483-4525 price area, is between 67% to 79%, depending on the resistance levels reached.

Industrivärden H1, Discount and Target NAV