In today’s briefing:
- A Passive Flow Trading Event that Sparked Wild Price Action in Korea Is Happening Again
- Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays
- [Quiddity Index] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible
- LG CNS IPO Industry Analysis
- LG CNS Pre-IPO – Peer Comp – Doesn’t Really Stand Out in Growth, Although OPM Were at the Higher End
A Passive Flow Trading Event that Sparked Wild Price Action in Korea Is Happening Again
- This event drew significant attention, causing unusual price action. From Sept 20 to Nov 29, corrections in the deletions far outpaced the KOSPI, with the trend holding across key checkpoints.
- We’re watching 4 stocks: Kumho Petro, Lotte Chemical, Posco DX, and EcoPro Materials. SK Bioscience and Enchem are close, with small price moves likely pushing them out.
- Based on past rebalancing patterns, proactive positions on these names could trigger strong price action. All except Enchem have listed futures and solid volume, making trading conditions favorable.
Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays
- At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.
- Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.
- Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it’s prime for aggressive dividend arbitrage.
[Quiddity Index] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2025.
- We expect up to six ADDs and six DELs in the KOSPI 200 index during the June 2025 index rebal event based on the latest available data.
LG CNS IPO Industry Analysis
- The IT service market in Korea is estimated to be 51.5 trillion won in 2023 and it is expected to growth at a CAGR of 9.4% from 2023 to 2028.
- The Cloud & AI market is expected to grow at an annual rate of 10.5% from 32.7 trillion won in 2023 to 53.8 trillion won in 2028.
- LG CNS had about 8.9% share in the IT services market in Korea in 2023.
LG CNS Pre-IPO – Peer Comp – Doesn’t Really Stand Out in Growth, Although OPM Were at the Higher End
- LG CNS (LGCNSZ KS) is looking to raise around US$850m in its upcoming Korea IPO.
- LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
- In a previous note, we looked at the firm’s past performance. In this note, we undertake a peer comparison.
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