Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

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Event-Driven

<div><p>Inheritance tax on listed companies' stocks is calculated based on the average of 4-month daily closing prices: 2 months before and 2 months after the passing.</p></div><div><p><strong>For Lee Kun-hee (who passed away on October 25), the calculation period is August 24 to December 22.</strong></p></div><div>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":2,"2":"4M avg price"}'>4M avg price</td>
</tr>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"005930"}' data-sheets-formula='="005930"'>005930</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":3,"3":62394}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩62,394</td>
</tr>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd Preference Shares Non Voting"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd Preference Shares</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"005935"}' data-sheets-formula='="005935"'>005935</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":3,"3":55697}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩55,697</td>
</tr>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Samsung SDS Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung SDS Co Ltd</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"018260"}' data-sheets-formula='="018260"'>018260</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":3,"3":173048}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩173,048</td>
</tr>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T Corp</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"028260"}' data-sheets-formula='="028260"'>028260</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":3,"3":114680}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩114,680</td>
</tr>
<tr>
<td style="width: 379.282px;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Life Insurance co., Ltd</td>
<td style="text-align: right; width: 131.875px;" data-sheets-value='{"1":2,"2":"032830"}' data-sheets-formula='="032830"'>032830</td>
<td style="text-align: right; width: 171.875px;" data-sheets-value='{"1":3,"3":66276}' data-sheets-numberformat='{"1":4,"2":"[$₩-412]#,##0"}'>₩66,276</td>
</tr>
<tr><td colspan="3" rowspan="1" style="width: 724.468px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>
<p>At the 4M avg, the total taxable amount is ₩18.96T (for listed companies).</p>
<table class="table table-striped">
<colgroup>
<col width="300">
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"Ticker"}'>Ticker</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":2,"2":"Stake"}'>Stake</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":2,"2":"Shares"}'>Shares</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":2,"2":"Taxable (₩B)"}'>Taxable (₩B)</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"005930"}' data-sheets-formula='="005930"'>005930</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":3,"3":0.0418}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>4.18%</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":3,"3":249273200}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>249,273,200</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":15553.1520408}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[-8]C[-2]/1000000000">15,553.2</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Samsung Electronics Co Ltd Preference Shares Non Voting"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Electronics Co Ltd Preference Shares</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"005935"}' data-sheets-formula='="005935"'>005935</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":3,"3":0.0008}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.08%</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":3,"3":619900}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>619,900</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":34.5265703}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[-8]C[-2]/1000000000">34.5</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Samsung SDS Co Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung SDS Co Ltd</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"018260"}' data-sheets-formula='="018260"'>018260</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":3,"3":0.0001}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>0.01%</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":3,"3":9701}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>9,701</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":1.678738648}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[-8]C[-2]/1000000000">1.7</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Samsung C&amp;T Corp"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung C&amp;T Corp</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"028260"}' data-sheets-formula='="028260"'>028260</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":3,"3":0.0288}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>2.88%</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":3,"3":5425733}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>5,425,733</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":622.22306044}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[-8]C[-2]/1000000000">622.2</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Samsung Life Insurance co., Ltd"}' data-sheets-formula='=googlefinance(R[0]C[1], "name")'>Samsung Life Insurance co., Ltd</td>
<td style="text-align: right; width: 78.5417px;" data-sheets-value='{"1":2,"2":"032830"}' data-sheets-formula='="032830"'>032830</td>
<td style="text-align: right; width: 85.9491px;" data-sheets-value='{"1":3,"3":0.2076}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.76%</td>
<td style="text-align: right; width: 96.3195px;" data-sheets-value='{"1":3,"3":41519180}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>41,519,180</td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":2751.72517368}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[0]C[-1]*R[-8]C[-2]/1000000000">2,751.7</td>
</tr>
<tr>
<td style="width: 287.431px;" data-sheets-value='{"1":2,"2":"Total"}'><strong>Total</strong></td>
<td style="text-align: right; width: 78.5417px;"><strong>-</strong></td>
<td style="text-align: right; width: 85.9491px;"><strong>-</strong></td>
<td style="text-align: right; width: 96.3195px;"><strong>-</strong></td>
<td style="text-align: right; width: 92.6157px;" data-sheets-value='{"1":3,"3":18963.305583867997}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=sum(R[-5]C[0]:R[-1]C[0])"><strong>18,963.3</strong></td>
</tr>
<tr><td colspan="5" style="width: 723.727px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>
<p><strong>The effective tax rate should come down to 58.2%, leading to ₩11.04T as a total inheritance tax for the Lee family (for listed companies).</strong></p>
<p>There is about a ₩500B increase since the passing.</p>
<table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Tax calculations (₩B)"}'>Tax calculations (₩B)</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Taxable"}'>Taxable</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":18963.305583867997}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[-4]C[3]">18,963.3</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Upper tax rate"}'>Upper tax rate</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.5}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>50.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Major shareholder premium"}'>Major shareholder premium</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Voluntary payment deduction"}'>Voluntary payment deduction</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.03}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>3.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Effective tax rate"}'><strong>- Effective tax rate</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.582}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[1]C[0]/R[-4]C[0]"><strong>58.20%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Tax"}'><strong>Tax</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":11036.643849811173}' data-sheets-numberformat='{"1":2,"2":"#,##0.0","3":1}' data-sheets-formula="=R[-5]C[0]*R[-4]C[0]*(1+R[-3]C[0])*(1-R[-2]C[0])"><strong>11,036.6</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: NTS"}'>Source: NTS</td></tr>
</tbody>
</table>
</div>

Inheritance tax on listed companies' stocks is calculated based on the average of 4-month daily closing prices: 2 months before and 2 months after the passing.For Lee Kun-hee (who passed away on October 25), the calculation period is August 24 to December 22.








Name
Ticker
4M avg price


Samsung Electronics Co Ltd
005930
₩62,394


Samsung Electronics Co Ltd Preference Shares
005935
₩55,697


Samsung SDS Co Ltd
018260
₩173,048


Samsung C&amp;T Corp
028260
₩114,680


Samsung Life Insurance co., Ltd
032830
₩66,276

Source: KRX


At the 4M avg, the total taxable amount is ₩18.96T (for listed companies).










Name
Ticker
Stake
Shares
Taxable (₩B)


Samsung Electronics Co Ltd
005930
4.18%
249,273,200
15,553.2


Samsung Electronics Co Ltd Preference Shares
005935
0.08%
619,900
34.5


Samsung SDS Co Ltd
018260
0.01%
9,701
1.7


Samsung C&amp;T Corp
028260
2.88%
5,425,733
622.2


Samsung Life Insurance co., Ltd
032830
20.76%
41,519,180
2,751.7


Total
-
-
-
18,963.3

Source: KRX


The effective tax rate should come down to 58.2%, leading to ₩11.04T as a total inheritance tax for the Lee family (for listed companies).
There is about a ₩500B increase since the passing.






Tax calculations (₩B)

Taxable
18,963.3


Upper tax rate
50.00%


Major shareholder premium
20.00%


Voluntary payment deduction
3.00%


- Effective tax rate
58.20%


Tax
11,036.6

Source: NTS




Samsung Elec Ex-Div Unhedged Outright Trade