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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Equity Capital Markets

IsuPetasys Co., Ltd. manufactures printed circuit boards (PCBs) specializing in high multilayer PCBs.  The Company exports its products to Cisco Systems, Brocade Communications Systems, and Sun Microsystems in the United States.

<ul>
<li>ISU Petasys is betting the FSS chief, tied to the current administration, won’t have much market power due to the impeachment drama—and that gamble looks likely to pay off.</li>
<li>ISU Petasys' rights offering still offers solid trade potential, with 97% stockholder allocation and only 21% from the major shareholder, increasing the chance of significant unclaimed shares hitting the market.</li>
<li>Our plan is to grab stock rights cheap, ride the 15% discount, and capitalize on stock pullbacks, though lack of futures limits short hedging. Still, an unhedged setup looks promising.</li>
</ul>


ISU Petasys is betting the FSS chief, tied to the current administration, won’t have much market power due to the impeachment drama—and that gamble looks likely to pay off.
ISU Petasys' rights offering still offers solid trade potential, with 97% stockholder allocation and only 21% from the major shareholder, increasing the chance of significant unclaimed shares hitting the market.
Our plan is to grab stock rights cheap, ride the 15% discount, and capitalize on stock pullbacks, though lack of futures limits short hedging. Still, an unhedged setup looks promising.


ISU Petasys Ignores FSS: A Likely Short-Term Dip Sets up an Opportunity to Target 15% Discount

Event-Driven

JB Financial Group Co. Ltd., a holding company, provides a full range of consumer and commercial banking-related financial services.

<ul>
<li>Since Sep 24, 32 companies made Value-Up disclosures. After filtering, 17 remain, but KRX will keep inclusions tight. They’ll likely use PBR and ROE rankings for final selection.</li>
<li>We have 6 names—3 financials, 2 healthcare, 1 industrial. New Value-Up disclosures through Dec 6 could add more, but these 6 are the frontrunners for now.</li>
<li>KRX is likely to announce results by Dec 10-11. Start eyeing entry points 10 days prior, and if price action heats up early, consider pulling the trigger sooner.</li>
</ul>


Since Sep 24, 32 companies made Value-Up disclosures. After filtering, 17 remain, but KRX will keep inclusions tight. They’ll likely use PBR and ROE rankings for final selection.
We have 6 names—3 financials, 2 healthcare, 1 industrial. New Value-Up disclosures through Dec 6 could add more, but these 6 are the frontrunners for now.
KRX is likely to announce results by Dec 10-11. Start eyeing entry points 10 days prior, and if price action heats up early, consider pulling the trigger sooner.


KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown

Thematic (Sector/Industry)

<ul>
<li>Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.</li>
<li>The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.</li>
<li>Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.</li>
</ul>


Korea’s impeachment drama hit a tipping point, with the second motion against Yoon set for a vote on the 14th, and the market pricing in a 100% chance of approval.
The market’s all-in on a Democratic Party win in May, as public sentiment against the president makes the ruling party’s chances virtually non-existent.
Target stocks impacted by corporate law changes, then focus on sector-specific plays, particularly the energy policy shift and growing support for virtual assets.


Yoon’s Impeachment a Lock, Regime Change Trade Set for May

Doosan Robotics Inc. develops and manufactures industrial equipment. The Company manufactures robots, linear actuation devices, automated production equipment, and other products. Doosan Robotics conducts businesses in South Korea.

<ul>
<li>If stocks close above the appraisal prices on the 10th, NPS will support the merger; otherwise, they’ll abstain to secure their appraisal rights.</li>
<li>Due to cancellation risk hitting the ceiling, NPS will likely exercise half its position and start buybacks after the results.</li>
<li>With both stocks heavily weighted in KOSPI 200, NPS is likely to opt for a tight buyback window, boosting chances for upward price action on Doosan's shares in that period.</li>
</ul>


If stocks close above the appraisal prices on the 10th, NPS will support the merger; otherwise, they’ll abstain to secure their appraisal rights.
Due to cancellation risk hitting the ceiling, NPS will likely exercise half its position and start buybacks after the results.
With both stocks heavily weighted in KOSPI 200, NPS is likely to opt for a tight buyback window, boosting chances for upward price action on Doosan's shares in that period.


Flow Dynamics from NPS Exercising Appraisal Rights on Doosan Merger

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

<ul>
<li>Korea Zinc's free float is dropping from 52% to 31%, a 21%p cut.</li>
<li>Despite rising volume, retail still dominates. With this trend continuing, the 80,000-share sell volume is unlikely to get buried without triggering noticeable price moves.</li>
<li>Ahead of big one-day flow events, shorts are loaded, causing a dip. On rebalance day, traders buy back, triggering a bounce. This event is likely to follow the same pattern.</li>
</ul>


Korea Zinc's free float is dropping from 52% to 31%, a 21%p cut.
Despite rising volume, retail still dominates. With this trend continuing, the 80,000-share sell volume is unlikely to get buried without triggering noticeable price moves.
Ahead of big one-day flow events, shorts are loaded, causing a dip. On rebalance day, traders buy back, triggering a bounce. This event is likely to follow the same pattern.


Flow Trading Setup Triggered by Korea Zinc’s 21%p Float Rate Cut in KOSPI 200

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

Sanghyun Park
Korea / Special Sits, Pairs, Index Rebalancing
• Clepsydra Capital

ISU Petasys Ignores FSS: A Likely Short-Term Dip Sets up an Opportunity to Target 15% Discount

ISU Petasys is pushing forward with the rights offering, ignoring the FSS. I am expecting a short-term dip, but it will set up a great opportunity...

Sanghyun Park

KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown

KRX is likely to announce the Value Up Index results after tomorrow’s close. Add count’s basically a done deal—5 names in the bag. KB, Hana, and...

Sanghyun Park

Yoon’s Impeachment a Lock, Regime Change Trade Set for May

Yoon’s impeachment is pretty much a lock, with the market pricing in a 100% chance. We should get ready for theme trading plays aiming at the...

Sanghyun Park

Flow Dynamics from NPS Exercising Appraisal Rights on Doosan Merger

This post dives into the flow dynamics triggered by NPS's conditional exercise of appraisal rights in the Doosan merger.

Sanghyun Park

Flow Trading Setup Triggered by Korea Zinc’s 21%p Float Rate Cut in KOSPI 200

This post takes a closer look at the flow trading setup created by the 21%p float rate cut of Korea Zinc in the KOSPI 200 and how it’s likely to...

Sanghyun Park