In today’s briefing:
- Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
- A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- K Bank IPO (279570 KS): Index Inclusion Timeline
Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
- KRX faces challenges balancing the Value-Up Index as a benchmark while ensuring real disclosures, but passive inflows remain steady with local pension funds still interested.
- KRX’s potential December mini rebalancing increases uncertainty but may just lead to minor tweaks, adding KB and Hana while removing a few stocks from Communication Services.
- The Value-Up Index resembles the KOSPI 200, using 30-40% GICS stocks and KOSDAQ 150, which may spark trading strategies focused on performance gaps within sectors.
A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- On 26 September, the Korea Exchange announced that it is considering a “special rebalancing” of the Korea Value-Up Index in December 2024.
- In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
- If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion.
K Bank IPO (279570 KS): Index Inclusion Timeline
- K Bank (279570 KS) is looking to raise up to KRW 984bn (US$738m), valuing the company at KRW 5tn (US$3.75bn) at the top end of the IPO price range.
- Close peer KakaoBank (323410 KS) and regional peer SBI Sumishin Net Bank (7163 JP) have been trading lower recently and the IPO could price lower than the top end.
- The change in KOSPI2 INDEX Fast Entry rules will leave the stock out of the index till June 2025. Inclusion in global indices will have to wait a while too.
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