Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>SK Inc (034730 KS) announced that it plans to sell about 1.25 trillion won worth of its stake (13.94%) in SK Biopharmaceuticals (326030 KS) through a PRS contract.</li>
<li>SK Inc plans to sell 10.917 million shares of SK Biopharm on 30 March 2026. Selling price for SK Biopharm is 114,500 won.</li>
<li>We believe that this PRS transaction is likely to positively impact SK Inc and SKC. However, it should have a slight negative impact on SK Biopharm.</li>
</ul>


SK Inc (034730 KS) announced that it plans to sell about 1.25 trillion won worth of its stake (13.94%) in SK Biopharmaceuticals (326030 KS) through a PRS contract.
SK Inc plans to sell 10.917 million shares of SK Biopharm on 30 March 2026. Selling price for SK Biopharm is 114,500 won.
We believe that this PRS transaction is likely to positively impact SK Inc and SKC. However, it should have a slight negative impact on SK Biopharm.


SK Inc: Selling 1.25 Trillion Won Worth of SK Biopharm Through a PRS Contract

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

<ul>
<li>Following the short sell ban announced on the weekend, the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> opened higher on Monday and rallied through the day.</li>
<li>A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.</li>
<li>Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.</li>
</ul>


Following the short sell ban announced on the weekend, the KOSPI 200 and KOSDAQ 150 opened higher on Monday and rallied through the day.
A lot of the intraday gains on Monday have been given up over the next two trading days. Surprisingly, KRX data indicates that not a lot of shorts have covered.
Foreigners have been net cash buyers since Monday (could indicate covering of offshore borrow) while retail were big sellers on Monday.


Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

Korea Stock Exchange KOSPI 200 / Event-Driven

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

<ul>
<li>Korea banned all short selling in March 2020 and resumed short selling only on <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> index constituents in May 2021.</li>
<li>News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.</li>
<li>There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.</li>
</ul>


Korea banned all short selling in March 2020 and resumed short selling only on KOSPI 200 and KOSDAQ 150 index constituents in May 2021.
News reports indicate that there could be another short sell ban as soon as the coming week. Indications are that the ban could last 6 months.
There are many implications of a total short sell ban including futures backwardation, market manipulation, and no emerging to developed market promotion.


Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

<ul>
<li>SKC Co announced a rights offering capital raise of 1 trillion won (US$700 million) to invest in new businesses (such as glass substrates) and improve its balance sheet.</li>
<li>SK Inc, the controlling shareholder of SKC with a 40.6% stake, agreed to participate in this rights offering with an oversubscription (120% of allocated shares).</li>
<li>Number of shares for the rights offering is 11.73 million shares. Expected dilution ratio is 23.6%. Expected rights offering price is 85,300 won which is 24% lower than current price.</li>
</ul>


SKC Co announced a rights offering capital raise of 1 trillion won (US$700 million) to invest in new businesses (such as glass substrates) and improve its balance sheet.
SK Inc, the controlling shareholder of SKC with a 40.6% stake, agreed to participate in this rights offering with an oversubscription (120% of allocated shares).
Number of shares for the rights offering is 11.73 million shares. Expected dilution ratio is 23.6%. Expected rights offering price is 85,300 won which is 24% lower than current price.


Cross Asset Strategy

<ul>
<li>We are introducing a new regular series called "Korea: Short Selling Data Analysis." We will try to provide this insight on a quarterly basis.</li>
<li>Net short balance ratio for top 20 stocks in KOSPI averaged about 1.7% three months ago, much lower than current levels (3%).</li>
<li>The average short interest ratio of these top 20 stocks in KOSPI with the highest short balance ratio was 2.6x as of 10 July 2025. </li>
</ul>


We are introducing a new regular series called "Korea: Short Selling Data Analysis." We will try to provide this insight on a quarterly basis.
Net short balance ratio for top 20 stocks in KOSPI averaged about 1.7% three months ago, much lower than current levels (3%).
The average short interest ratio of these top 20 stocks in KOSPI with the highest short balance ratio was 2.6x as of 10 July 2025. 


Korea: Short Selling Data Analysis: 3Q 2025

South Korea

SKC Co., Ltd. manufactures a variety of films, including polyester films, silicon coated films, and inkjet films.  The Company also produces chemical products, such as propylene oxide, propylene glycol, and styrene monomer. In addition, SKC provides materials for photovoltaic.

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SKC Co Ltd (011790 KS)

SK Inc: Selling 1.25 Trillion Won Worth of SK Biopharm Through a PRS Contract

SK Inc (034730 KS) announced that it plans to sell about 1.25 trillion won worth of its stake (13.94%) in SK Biopharmaceuticals (326030 KS) through...

Douglas Kim

Korea Short Sell Ban: Not a Lot Covered on Monday; Shorts Holding On?

Not a lot of shorts were covered on Monday. There could be more covering in the near term as the market drifts lower. KOSPI200 underperformed...

Brian Freitas

Korea Short Sell Ban: Background, Manipulation, Holdings, Flows, Short Interest, Implications

Media reports indicate that there could be a temporary short sell ban in Korea. This could lead to futures backwardation, market manipulation and a...

Brian Freitas

SKC: Rights Offering of 1 Trillion Won

We believe that the market is likely to view the 1 trillion won rights offering of SKC negatively mainly due to 23.6% share dilution and worsening...

Douglas Kim

Korea: Short Selling Data Analysis: 3Q 2025

We are introducing a new regular series called "Korea: Short Selling Data Analysis." We will try to provide this insight on a quarterly basis.

Douglas Kim

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