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>Personally, the key trading angle is Kum Yang’s exit, which could slash entry costs for the capital raise, with the review announcement dropping as stock rights trading starts.</li>
<li>Along with the usual hit to the pricing from index trackers unloading for rebalancing, there’s a strong chance their sell orders might also include stock rights.</li>
<li>From an entry cost perspective, this November review could trigger a sharp, short-term drop in costs due to stock rights dumping, similar to what we saw with CJ CGV.</li>
</ul>


Personally, the key trading angle is Kum Yang’s exit, which could slash entry costs for the capital raise, with the review announcement dropping as stock rights trading starts.
Along with the usual hit to the pricing from index trackers unloading for rebalancing, there’s a strong chance their sell orders might also include stock rights.
From an entry cost perspective, this November review could trigger a sharp, short-term drop in costs due to stock rights dumping, similar to what we saw with CJ CGV.


Connecting the Dots Between Kum Yang’s Rights Offer & Global Index November Review

<ul>
<li>LG Display's tight stock rights trading prompts a need to assess potential trading opportunities. Taihan Electric Wire's concurrent capital increase warrants close observation.</li>
<li>Watch for a potentially wider spread in Taihan Electric Wire's stock rights trading from the 22nd, given local institutional demand focus on LG Display may create a buying vacuum.</li>
<li>Observers speculate on a CJ CGV-like pattern at LG Display. With no current market movements, predicting such a scenario is difficult. Nonetheless, I'll monitor closely and share any developments.</li>
</ul>


LG Display's tight stock rights trading prompts a need to assess potential trading opportunities. Taihan Electric Wire's concurrent capital increase warrants close observation.
Watch for a potentially wider spread in Taihan Electric Wire's stock rights trading from the 22nd, given local institutional demand focus on LG Display may create a buying vacuum.
Observers speculate on a CJ CGV-like pattern at LG Display. With no current market movements, predicting such a scenario is difficult. Nonetheless, I'll monitor closely and share any developments.


Monitoring LG Display's Stock Rights Trading

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Hanwha Ocean's share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won. </li>
<li>Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months. </li>
<li>We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments. </li>
</ul>


Hanwha Ocean's share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won. 
Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months. 
We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments. 


Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won

<ul>
<li>We discuss the end of the mandatory lock-up periods for 40 stocks in Korea in August 2023, among which 2 are in KOSPI and 38 are in KOSDAQ.</li>
<li>These 40 stocks on average could be subject to further selling pressures in August and could underperform relative to the market. </li>
<li>Among these 40 stocks, the top five market cap stocks include HK inno.N, PhilEnergy, CJ CGV Co Ltd, Sure Soft Tech, and CanariaBio.</li>
</ul>


We discuss the end of the mandatory lock-up periods for 40 stocks in Korea in August 2023, among which 2 are in KOSPI and 38 are in KOSDAQ.
These 40 stocks on average could be subject to further selling pressures in August and could underperform relative to the market. 
Among these 40 stocks, the top five market cap stocks include HK inno.N, PhilEnergy, CJ CGV Co Ltd, Sure Soft Tech, and CanariaBio.


End of Mandatory Lock-Up Periods for 40 Companies in Korea in August 2023

<ul>
<li>A capital increase event of this size allows for a classic arbitrage trading strategy involving the acquisition of subscription rights and the simultaneous sale of an equal amount of SSF.</li>
<li>We can aim to profit from the price movements between warrants and SSF during the warrants trading period by getting out of the positions before the trading period ends.</li>
<li>We will also likely encounter a significantly juicy price difference between warrants+subscription and SSF, given a discount rate of 25% with an enormous capital increase rate, </li>
</ul>


A capital increase event of this size allows for a classic arbitrage trading strategy involving the acquisition of subscription rights and the simultaneous sale of an equal amount of SSF.
We can aim to profit from the price movements between warrants and SSF during the warrants trading period by getting out of the positions before the trading period ends.
We will also likely encounter a significantly juicy price difference between warrants+subscription and SSF, given a discount rate of 25% with an enormous capital increase rate, 


Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV's Monumental Rights Offer

South Korea

CJ CGV Co., Ltd. develops and operates multi-screen movie theaters in South Korea.  The Company's theater complex also conducts stores and restaurants in theaters, and offers advertisement through screens.

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CJ CGV Co Ltd (079160 KS)

Connecting the Dots Between Kum Yang’s Rights Offer & Global Index November Review

This post outlines the current screening status of the Global Index November Review for Korean stocks and explores how it could impact Kum Yang's...

Sanghyun Park

Monitoring LG Display's Stock Rights Trading

This post delves into the observations made in LG Display's stock rights trading and examines the potential trading opportunities that may stem...

Sanghyun Park

Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won

Hanwha Ocean completed the subscription for its 1.5 trillion won rights offering targeting employee stock ownership association and existing...

Douglas Kim

End of Mandatory Lock-Up Periods for 40 Companies in Korea in August 2023

We discuss the end of the mandatory lock-up periods for 40 stocks in Korea in August 2023, among which 2 are in KOSPI and 38 are in KOSDAQ.

Douglas Kim

Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV's Monumental Rights Offer

This post delves into CJ CGV's enormous rights offer and examines two profitable arbitrage trading possibilities that will likely arise from it.

Sanghyun Park

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