Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>Some still think we must close the borrow pre-settlement in a stock-for-stock merger. But KSD handles it fine — no need to pre-cover if shares stay lendable post-swap.</li>
<li>Spread flipped negative — rare setup in Korea. Tight float on both sides (insider-heavy) is killing liquidity and borrow, leading to this reverse arb play.</li>
<li>Deal break risk is minimal, new share listing is relatively soon, and the negative spread may widen—making this a compelling setup for a reverse arb play.</li>
</ul>


Some still think we must close the borrow pre-settlement in a stock-for-stock merger. But KSD handles it fine — no need to pre-cover if shares stay lendable post-swap.
Spread flipped negative — rare setup in Korea. Tight float on both sides (insider-heavy) is killing liquidity and borrow, leading to this reverse arb play.
Deal break risk is minimal, new share listing is relatively soon, and the negative spread may widen—making this a compelling setup for a reverse arb play.


Clearing a Common Misconception — No Pre-Cover Needed in Hanil Stock-For-Stock Swap

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>After the market close today (17 July), Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge.</li>
<li>Through this merger, Hanil Cement (on a combined basis with pro-forma sales of 1.74 trillion won in 2024) will become the largest cement company in Korea after Ssangyong Cement Industrial.</li>
<li>We expect this merger to have a positive impact on both companies and they are likely to outperform the market and other local cement producers this year. </li>
</ul>


After the market close today (17 July), Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge.
Through this merger, Hanil Cement (on a combined basis with pro-forma sales of 1.74 trillion won in 2024) will become the largest cement company in Korea after Ssangyong Cement Industrial.
We expect this merger to have a positive impact on both companies and they are likely to outperform the market and other local cement producers this year. 


A Merger Between Hanil Cement and Hanil Hyundai Cement to Become the #1 Cement Player in Korea

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of KRX Stocks as of Mar 29th which has an aggregated short interest worth USD7.4bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We estimate short interest decreased by 2.5% WoW and highlight short interest changes in Posco.</li>
</ul>


We analyzed the changes in short interest of KRX Stocks as of Mar 29th which has an aggregated short interest worth USD7.4bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We estimate short interest decreased by 2.5% WoW and highlight short interest changes in Posco.


KRX Short Interest Weekly (Mar 29th): Posco

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 7 adds and 7 deletes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> rebalance to be implemented at the close on 9 June.</li>
<li>There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.</li>
<li>The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.</li>
</ul>


There are 7 adds and 7 deletes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) rebalance to be implemented at the close on 9 June.
There are also a bunch of stocks that will have changes applied to their free float. There were announced last week and are much less tracked.
The flows and impact on some of the float change names are significant and pre-positioning and passive flows could move the stocks over the next few days.


KOSPI200 Index Rebalance: Float Changes, Flows & Trades

<ul>
<li>Flows from the ETFs/index funds serve as a minimal flow for rebalancing trading at the close on June 9. The total AUM is ₩18.9T: ETFs ₩15.0T and index funds ₩3.9T.</li>
<li>There are only three trading days left until the rebalancing trading. At this point, a setup aimed at the NPS/Insurance's preemptive trading seems a bit off, timing-wise.</li>
<li>It seems more appropriate at this point to design a day basket-trading based on the minimal flow size on the day of rebalancing trading, June 9.</li>
</ul>


Flows from the ETFs/index funds serve as a minimal flow for rebalancing trading at the close on June 9. The total AUM is ₩18.9T: ETFs ₩15.0T and index funds ₩3.9T.
There are only three trading days left until the rebalancing trading. At this point, a setup aimed at the NPS/Insurance's preemptive trading seems a bit off, timing-wise.
It seems more appropriate at this point to design a day basket-trading based on the minimal flow size on the day of rebalancing trading, June 9.


KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading

South Korea

Hanil Cement co.,Ltd. operates as a cement manufacturing company. The Company produces and sells cement, special cement, ready mixed concrete products, high solidity admixture, and other products. Hanil Cement markets its products throughout Korea.

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Hanil Cement Co Ltd/New (300720 KS)

Clearing a Common Misconception — No Pre-Cover Needed in Hanil Stock-For-Stock Swap

This post clears up a common misconception—especially relevant to the ongoing Hanil merger swap: we don’t need to close borrowed shares before...

Sanghyun Park

A Merger Between Hanil Cement and Hanil Hyundai Cement to Become the #1 Cement Player in Korea

Hanil Cement Co Ltd/New (300720 KS) and Hanil Hyundai Cement (006390 KS) announced that they will merge. Through this merger, the combined entity...

Douglas Kim

KRX Short Interest Weekly (Mar 29th): Posco

We analyzed KRX short interest report for the past week. We estimate short interest decreased by 2.5% WoW and highlighted short interest changes in...

Ke Yan, CFA, FRM

KOSPI200 Index Rebalance: Float Changes, Flows & Trades

There are significant flows and impact on some stocks that have float changes at the upcoming KOSPI2 rebalance. With over 5 days ADV to buy,...

Brian Freitas

KOSPI 200 Rebalancing Minimal Flow at the Close on June 9 For Day Basket-Trading

This post gathers the combined AUM of the local ETFs/index funds mirroring the KOSPI 200 and estimates the minimal passive flow on the rebalancing...

Sanghyun Park

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