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>The KAL event is almost over. But we still have Asiana Airlines. The KDB's Asiana CB conversion should also be considered a foregone conclusion.</li>
<li>Applying the case of KAL, the KDB will likely file conversion when 30 days have elapsed since receiving the repayment notice. For this, the prevailing local consensus is June 10.</li>
<li>Conversion filing on July 8 and listing on July 29 with the 15-day delay rule applied is a likely scenario. Hence, our entry point should be from July 4.</li>
</ul>


The KAL event is almost over. But we still have Asiana Airlines. The KDB's Asiana CB conversion should also be considered a foregone conclusion.
Applying the case of KAL, the KDB will likely file conversion when 30 days have elapsed since receiving the repayment notice. For this, the prevailing local consensus is June 10.
Conversion filing on July 8 and listing on July 29 with the 15-day delay rule applied is a likely scenario. Hence, our entry point should be from July 4.


HMM-Like Dilution Event: Korean Air Is Nearly Done, But Asiana Airlines Gearing Up

<ul>
<li>Korean Air might have already notified the creditors of its early repayment decision. Asiana will likely follow suit, immediately triggering the creditors to exercise the conversion rights.</li>
<li>So, both Korean Air and Asiana's conversion should be a foregone conclusion. There is only uncertainty about how many conversions we will actually see for Asiana from the KDB.</li>
<li>Instead of preemptive position setup at this point, I would consider starting the position build-up within the 2-3 day window from the repayment filing to CB conversion.</li>
</ul>


Korean Air might have already notified the creditors of its early repayment decision. Asiana will likely follow suit, immediately triggering the creditors to exercise the conversion rights.
So, both Korean Air and Asiana's conversion should be a foregone conclusion. There is only uncertainty about how many conversions we will actually see for Asiana from the KDB.
Instead of preemptive position setup at this point, I would consider starting the position build-up within the 2-3 day window from the repayment filing to CB conversion.


Korean Air & Asiana Airlines: Current Status of CB Conversion Event

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value &amp; Mkt Cap." </li>
<li>Starting this weekly, we include stocks in both KOSPI and KOSDAQ. All the stocks in KOSPI and KOSDAQ are ranked, adjusted for market cap and trading value. </li>
<li>Among the top 20 performers, NCSoft, Hyundai Motor, Kia Motors, Dohwa Engineering, DB Hitek, SK Telecom, and KT Corp were included. </li>
</ul>


This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value &amp; Mkt Cap." 
Starting this weekly, we include stocks in both KOSPI and KOSDAQ. All the stocks in KOSPI and KOSDAQ are ranked, adjusted for market cap and trading value. 
Among the top 20 performers, NCSoft, Hyundai Motor, Kia Motors, Dohwa Engineering, DB Hitek, SK Telecom, and KT Corp were included. 


Top 20 Best Performers in the Korean Stock Market (Week of 13 May)

<ul>
<li>Korean Air will request the KDB and the KEXIM for early repayment before the step-up kicks in. Then, the creditors  decide conversion using Korean Air's claim as an excuse.</li>
<li>This is exactly the same as the case of HMM, whose stock price began to face corrections 7-10 trading days before the conversion announcement and peaked on the announcement date.</li>
<li>So, aiming at the possibility of a conversion announcement coming out in the third week of May, I recommend gradually building up short positions starting next week.</li>
</ul>


Korean Air will request the KDB and the KEXIM for early repayment before the step-up kicks in. Then, the creditors  decide conversion using Korean Air's claim as an excuse.
This is exactly the same as the case of HMM, whose stock price began to face corrections 7-10 trading days before the conversion announcement and peaked on the announcement date.
So, aiming at the possibility of a conversion announcement coming out in the third week of May, I recommend gradually building up short positions starting next week.


Korean Air Will Likely Face an HMM-Like CB Conversion Overhang Risk

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

Quantitative Analysis

<ul>
<li>We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.</li>
<li>Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd-3388a037-4214-4997-b45d-520518cfdb57" target="_blank" data-smartkarma-citation="entities:10987:1" rel="noopener">China Merchants Bank H (3968 HK)</a> has seen the largest short covering as the stock has tumbled in the last couple of weeks.</li>
</ul>


We look at short interest across Hong Kong, Japan, Korea and Taiwan in April to identify stocks/sectors that have seen the largest changes in each market.
Korea and Taiwan are showing a clear divergence with short notional increasing as the market moves lower, indicative of new shorts being initiated.

China Merchants Bank H (3968 HK) has seen the largest short covering as the stock has tumbled in the last couple of weeks.


Asia Short Interest: Large Moves in April

South Korea

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

HMM Co., Ltd. (011200 KS)

HMM-Like Dilution Event: Korean Air Is Nearly Done, But Asiana Airlines Gearing Up

This post discusses a likely schedule of Asiana Airlines' CB conversion event, which allows us to capture a trading entry point for an HMM-like...

Sanghyun Park

Korean Air & Asiana Airlines: Current Status of CB Conversion Event

This post investigates the current status of Korean Air and Asiana Airlines' CB conversion event by the creditors: the KDB and the Korea EXIM.

Sanghyun Park

Top 20 Best Performers in the Korean Stock Market (Week of 13 May)

This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value & Mkt Cap." Starting this...

Douglas Kim

Korean Air Will Likely Face an HMM-Like CB Conversion Overhang Risk

This post investigates Korean Air's CB conversion overhang risk, which opens up shorting opportunities in the short term.

Sanghyun Park

Asia Short Interest: Large Moves in April

Short notional in Korea and Taiwan has been increasing as the market has been moving lower. Shorts on China Merchant Bank have been covered in...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)