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.

Event-Driven

SK IE Technology Co., Ltd operates as a material solution provider. The Company provides information material solutions, electronic materials solutions, and other products. SK IE Technology conducts businesses across worldwide.

<ul>
<li>Anticipation grows for increased block deals before July 24th's pre-announcement rule takes effect, emerging as a key investment focus in the local market.</li>
<li>The local market expects heightened activity in the three weeks post-May 15th, following first-quarter earnings announcements, a strategic move to mitigate insider trading controversies.</li>
<li>Local traders eagerly await which companies will capitalize on the post-first-quarter earnings window, with a highly anticipated block deal involving SK Innovation selling a portion of its stake in SKIET.</li>
</ul>


Anticipation grows for increased block deals before July 24th's pre-announcement rule takes effect, emerging as a key investment focus in the local market.
The local market expects heightened activity in the three weeks post-May 15th, following first-quarter earnings announcements, a strategic move to mitigate insider trading controversies.
Local traders eagerly await which companies will capitalize on the post-first-quarter earnings window, with a highly anticipated block deal involving SK Innovation selling a portion of its stake in SKIET.


Key Timing Window for a Surge in Block Deals Before Pre-Disclosure Takes Effect in July

Naver Corp. provides Internet site with web portal services, such as search engine, online game and content development.  The Company also offers marketing service through text and banner advertisement.

<ul>
<li>Naver doesn't view the sale of its A Holdings stake unfavorably; insiders suggest it's been planning this move since last year.</li>
<li>Market speculation suggests Naver was disappointed by Softbank's rejection of CLOVA X in LINE, prompting plans to sell A Holdings stake for AI development. A sale agreement is expected soon.</li>
<li>The method through which Softbank secures funds for this acquisition is worth the attention from a short-term trading perspective.</li>
</ul>


Naver doesn't view the sale of its A Holdings stake unfavorably; insiders suggest it's been planning this move since last year.
Market speculation suggests Naver was disappointed by Softbank's rejection of CLOVA X in LINE, prompting plans to sell A Holdings stake for AI development. A sale agreement is expected soon.
The method through which Softbank secures funds for this acquisition is worth the attention from a short-term trading perspective.


Local Reports in Korea Regarding A Holdings Stake Sale Between Naver & Softbank

LG Chem Ltd. is a chemical manufacturer. The Company's products include petrochemicals, plastic resins, and engineering plastics. LG Chem also produces industrial and electronic materials.

<ul>
<li>Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.</li>
<li>Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.</li>
<li>Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.</li>
</ul>


Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks' pre-June 14th price appreciation to anticipate impact distortions.
Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.


Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

Korea Stock Exchange KOSPI 200 / Event-Driven

The KOSPI 200 Index is a capitalization-weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index was developed with a base value of 100 as of January 3, 1990.

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

<ul>
<li>Nextrade aims to secure the business permit within the next year's second half. They intend to launch their services by the end of next year or early the following year.</li>
<li>All eyes are focused on the proposal to be operational from 8:30 AM to 11:59 PM, with the afternoon call auction session running from 3:00 PM to 6:00 PM.</li>
<li>It would be crucial to observe how the elongation of the time period for specific issues to be reflected in prices could potentially lead to changes in intraday flow patterns.</li>
</ul>


Nextrade aims to secure the business permit within the next year's second half. They intend to launch their services by the end of next year or early the following year.
All eyes are focused on the proposal to be operational from 8:30 AM to 11:59 PM, with the afternoon call auction session running from 3:00 PM to 6:00 PM.
It would be crucial to observe how the elongation of the time period for specific issues to be reflected in prices could potentially lead to changes in intraday flow patterns.


Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns

Hanmi Science Co., Ltd. produces pharmaceutical products, including antibiotics, vitamins, and intestinal tonics.  The Company also provides beverages and processes soft capsules for other pharmaceutical firms.

<ul>
<li>The local market anxiously awaits the family's ability to pay by early May. Failure could prompt the Tax Service to sell their pledged stocks, including Hanmi Science shares.</li>
<li>Preventing Tax Service from selling Hanmi Science shares requires additional collateral, unlikely due to existing pledges. Rumor suggests mother and daughter may sell shares before May, followed by Tax Service.</li>
<li>Given negotiation uncertainty with KKR, it's crucial to prepare for potential failure rather than solely relying on success, necessitating a pragmatic approach.</li>
</ul>


The local market anxiously awaits the family's ability to pay by early May. Failure could prompt the Tax Service to sell their pledged stocks, including Hanmi Science shares.
Preventing Tax Service from selling Hanmi Science shares requires additional collateral, unlikely due to existing pledges. Rumor suggests mother and daughter may sell shares before May, followed by Tax Service.
Given negotiation uncertainty with KKR, it's crucial to prepare for potential failure rather than solely relying on success, necessitating a pragmatic approach.


Imminent Block Deals Involving Hanmi Science Shares Due to Inheritance Tax Payments

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

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

Key Timing Window for a Surge in Block Deals Before Pre-Disclosure Takes Effect in July

The Maeil Business Newspaper (Maekyung) exclusively reported just now that SK Innovation is selling its stake in SKIET. The reported volume of the...

Sanghyun Park

Local Reports in Korea Regarding A Holdings Stake Sale Between Naver & Softbank

This post offers insights and updates sourced locally regarding the ongoing A Holdings stake sale negotiations between Naver and Softbank.

Sanghyun Park

Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14

This post highlights an upcoming flow trading event on June 14th, stemming from the annual rebalancing of Korea's two largest sector ETFs.

Sanghyun Park

Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns

The Financial Services Commission and the Financial Supervisory Service announced that they will launch the Alternative Trading System (ATS) called...

Sanghyun Park

Imminent Block Deals Involving Hanmi Science Shares Due to Inheritance Tax Payments

Reports indicate that the owners of Hanmi Science are poised to offload more than 50% of their stake to EQT Partners, securing approximately ₩1T....

Sanghyun Park