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

Reasons Why KT's Foreign Room Is Likely to Fall Below the 3.75% Cutoff Level

Clepsydra Capital

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

Event-Driven

<ul>
<li>KT’s foreign room is likely staying below 3.75% for November, setting up an ETF recall play. We've seen short-term buying pressure in similar past index reshuffles.</li>
<li>The ETF recall impact peaks right after the announcement. KT’s May downweight saw a 5% spike in two trading days post-announcement.</li>
<li>KT’s price moves more with downweights than SK Telecom’s because of higher overseas borrowing demand. This trend should hold, so setting up a position before the November announcement makes sense.</li>
</ul>


KT’s foreign room is likely staying below 3.75% for November, setting up an ETF recall play. We've seen short-term buying pressure in similar past index reshuffles.
The ETF recall impact peaks right after the announcement. KT’s May downweight saw a 5% spike in two trading days post-announcement.
KT’s price moves more with downweights than SK Telecom’s because of higher overseas borrowing demand. This trend should hold, so setting up a position before the November announcement makes sense.


Timing a Trade to Capitalize on KT’s November Global Index Deletion and the ETF Recall

KT Corp

Timing a Trade to Capitalize on KT’s November Global Index Deletion and the ETF Recall