Hedge tactics
http://msn.finance.sina.com.cn 2012-01-18 17:59 来源: 新浪财经
Strictly technical
After technical models sent a medium-term buy signal for the US market in late Dec 2011,the Kospi this month confirmed its shift from a bear market to a neutral market.
Improvements across a series of indicators suggest an increased likelihood of the Kospibreaking through resistance near 1,930, crucial for the index to return to a medium-termuptrend. We recommend gradually increasing exposure to stocks.
Time-adjusted P/E-based oversold strategy
Our time-adjusted P/E-based oversold strategy is a contrarian approach that focuses onoversold stocks based on time-adjusted P/E multiples and absolute share prices. Thisweek, we include Korea Aerospace Industries (following a recent drop and for its longtermgrowth potential), Kepco (also following a recent drop and for upward revisions toour EPS forecasts), and LG Electronics.
Relative-strength-based trading strategy
Last week, our long portfolio lost 1.59% and short portfolio lost 6.17% (while the Kospigained 2.13%). Looking ahead to the week beginning Jan 18, Himart, Korea AerospaceIndustries, and LG Uplus are showing the strongest momentum, and OCI, SamsungHeavy Industries, and Hanwha Chemical the weakest.
Pairs-trading strategy
We opened several trading pairs—long Hyundai E&C/short GS E&C, long HMCInvestment Securities/short SK Securities, long Bukwang Pharmaceutical/shortMyungmoon Pharm, long GS E&C/short Daelim Industrial, long Korea KumhoPetrochemical/short LG Chem, and long Fila Korea/short Handsome.
Weekly fund flow
The Kospi gained 1.8% over Jan 9-13 as foreign and domestic institutional investorsremained net buyers. Domestic institutional investors bought shipbuilding, chemicals,electronics, and semiconductors stocks, while selling IT hardware, construction, anddisplays. Foreign investors bought shipbuilding, autos, displays, and chemicals whileselling semiconductors, electronics, banking, and food & beverage stocks.