Daily Brief Energy/Materials: Kum Yang, Cosmochemical, Cemex SAB de CV ADR, Vedanta Resources, Ecolab Inc and more

• There will be 2 additions and 2 deletions for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the June rebalance that will be implemented on 8 June.
• Kum Yang (001570 KS) and Cosmochemical (005420 KS), both high probability names, are inclusions while Hwaseung Enterprise (241590 KS) and Dongwon Industries (006040 KS) are deletions.
• Not surpisingly, there is almost no short interest on the adds. Short interest on the deletes is higher and rising. Expect short covering on the deletes prior to implementation.

• Korea Exchange announced the KOSPI 200 and KOSDAQ 150 indices constituents changes today. 
• Kum Yang (001570 KS) and Cosmochemical (005420 KS) were included in the KOSPI 200. Dongwon Industries (006040 KS) and Hwaseung Enterprise (241590 KS) were excluded in KOSPI 200 index.
• We expect continued underperformance of Kumyang and Cosmo Chemical as many investors will now start to sell these stocks based on “buy on rumor, sell on news” strategy.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess CEMEX’s ESG as “Strong”, in line with its Environmental and Governance scores. The company has an “Adequate” score for the Social pillar. Controversies are “Immaterial” and Disclosure is “Strong”.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Vedanta Resources

• Ecolab performed well in the third quarter and managed an all-around beat.
• In the quarter, margins expanded significantly.
• Organic sales had a solid improvement across all segments, increasing from 12% in the fourth quarter to 13% in the first.