Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>PI Advanced Materials, a company specializing in polyimide, which has the largest market share globally, received final approval from KRX for a transfer listing from KOSDAQ to KOSPI. Since April of this year, PI Advanced Materials has been pursuing a transfer listing to KOSPI.</p><div class="content-highlight"><p><strong>Therefore, PI Advanced Materials will be delisted on the KOSDAQ and newly listed on the KOSPI at the same time on August 9th.</strong></p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/221/644/original/1.png?1627885803" class="editor-image img-responsive" data-smartkarma-image-id="221644"></figure><p></p></section><h2>KOSDAQ 150 exclusion</h2><p>PI Advanced Materials is currently a constituent of the KOSDAQ 150. Based on yesterday's closing price, the index weight is 0.61%. When the company is newly listed on the KOSPI on August 9th, it will be delisted from the KOSDAQ. So, it will be excluded from the KOSDAQ 150 on that day.</p><div class="content-highlight"><p><strong>This means that rebalancing trading should be done by index funds and ETFs that track the KOSDAQ 150 at the closing price of the previous trading day, August 6th.</strong></p></div><hr><p><em>In the case of KOSPI 200 inclusion, KRX considers transfer listings to be new listings. Therefore, the same rules as the fast entry rules applied to new listings apply, and if the conditions are not met, we have to wait until regular rebalancing.</em></p><p><em>The current market cap of PI Advanced Materials is far from conceivable for Fast Entry. So, we should aim for inclusion in the regular rebalancing this December, but the current situation is a bit tight to beat the buffer rule.</em></p>

PI Advanced Materials, a company specializing in polyimide, which has the largest market share globally, received final approval from KRX for a transfer listing from KOSDAQ to KOSPI. Since April of this year, PI Advanced Materials has been pursuing a transfer listing to KOSPI.Therefore, PI Advanced Materials will be delisted on the KOSDAQ and newly listed on the KOSPI at the same time on August 9th.KOSDAQ 150 exclusionPI Advanced Materials is currently a constituent of the KOSDAQ 150. Based on yesterday's closing price, the index weight is 0.61%. When the company is newly listed on the KOSPI on August 9th, it will be delisted from the KOSDAQ. So, it will be excluded from the KOSDAQ 150 on that day.This means that rebalancing trading should be done by index funds and ETFs that track the KOSDAQ 150 at the closing price of the previous trading day, August 6th.In the case of KOSPI 200 inclusion, KRX considers transfer listings to be new listings. Therefore, the same rules as the fast entry rules applied to new listings apply, and if the conditions are not met, we have to wait until regular rebalancing.The current market cap of PI Advanced Materials is far from conceivable for Fast Entry. So, we should aim for inclusion in the regular rebalancing this December, but the current situation is a bit tight to beat the buffer rule.

PI Advanced Materials KOSDAQ→KOSPI Relisting on August 9: Passive Flow Tracking