Daily Brief South Korea: Kakao Pay, E Mart Inc, Kurly Inc and more

In today’s briefing:

MSCI Korea: An Early Assessment of February Index Review

MSCI’s quarterly comprehensive index review begins with the February review. QIR disappears, and all quarters are subject to the SAIR rules.
Currently, no constituents face deletion risk. On the other hand, we have three potential additions: Hanwha Aerospace (012450 KS), Meritz Financial Group (138040 KS), and Kakao Pay (377300 KS).
Meritz Financial will likely take Meritz Fire’s place through a Continuation. Kakao’s chances have increased significantly due to the recent price rise and the comprehensive index review.

To MID migrants: Amorepacific Group (002790 KS), E Mart (139480 KS), Iljin Materials (020150 KS), Hanjin KAL (180640 KS), OCI (010060 KS), LX Semicon (108320 KS), and SOCAR (403550 KS)
To LARGE migrants: Hyundai Rotem (064350 KS), Hotel Shilla (008770 KS), GS Retail (007070 KS), CS Wind (112610 KS), and Posco International (047050 KS)
This time, the degree of predictability is high as the MC gap widened from an early point. So, we should consider building our position in phases from early next month.

Extending bookbuilding period to seven days (and test-the-waters) is unlikely to make any real difference. Leaving the financial capacity check to underwriters will likely cause sharp confusion in the market.
The purpose of penalizing so-called hot money, like flippers and non-pricing institutions, is understandable. However, whether FSC has fully considered the side effects caused by uniformly applying this is questionable.
Expanding the allowable price range on a listing day is the most crucial point we should pay attention to, and we must design a post-IPO trading strategy accordingly.

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