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

Hyosung Corporation / Equity Capital Markets

<ul>
<li>The Hyosung siblings swapped ₩60B in shares over August 13-14, raising the elder brother’s Hyosung Corp stake to 40.9% and lowering HS Hyosung below 3%.</li>
<li>The younger brother must sell additionally at least 11.2% of his 14.2% Hyosung Corp stake. The elder brother may buy, but his cash position and 40% stake limit his need.</li>
<li>This block deal will be the first to apply the new pre-disclosure rule. So, we should use it to test how the rule affects price movements for better entry timing.</li>
</ul>


The Hyosung siblings swapped ₩60B in shares over August 13-14, raising the elder brother’s Hyosung Corp stake to 40.9% and lowering HS Hyosung below 3%.
The younger brother must sell additionally at least 11.2% of his 14.2% Hyosung Corp stake. The elder brother may buy, but his cash position and 40% stake limit his need.
This block deal will be the first to apply the new pre-disclosure rule. So, we should use it to test how the rule affects price movements for better entry timing.


Hyosung Siblings' Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The December 2024 index review results for the KOSPI Indices were announced after the close on Thursday 21st November 2024.</li>
<li>There will be four ADDs and five DELs for KOSPI 200 during the December 2024 index rebal event. </li>
<li>We predicted 8 out of 9 changes correctly. We missed one of the DELs and we expected a couple extra changes which did not materialize.</li>
</ul>


The December 2024 index review results for the KOSPI Indices were announced after the close on Thursday 21st November 2024.
There will be four ADDs and five DELs for KOSPI 200 during the December 2024 index rebal event. 
We predicted 8 out of 9 changes correctly. We missed one of the DELs and we expected a couple extra changes which did not materialize.


KOSPI200 Dec24 Rebal: 4 ADDs, 5 DELs, Big ADV on Small Stocks

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

Hyosung Heavy Industries Corp / Event-Driven

<ul>
<li>There will be 4 additions and 5 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> at the next rebalance to be implemented at the close on 12 December.</li>
<li>The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.</li>
<li>The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.</li>
</ul>


There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.


KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyosung-corporation" target="_blank" data-smartkarma-citation="entities:20712:1" rel="noopener">Hyosung Corporation (004800 KS)</a> has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.</li>
<li>The stock will remain suspended from late June to late July. We expect <a href="https://www.smartkarma.com/entities/hyosung-corporation" target="_blank" data-smartkarma-citation="entities:20712:1" rel="noopener">Hyosung Corporation (004800 KS)</a> to maintain its index membership while the New Entity will not be added.</li>
<li>The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.</li>
</ul>



Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.


Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

<ul>
<li>Hyosung Corp's split diverges from usual Korean market splits. No tender offer is expected post-new holding company formation, reducing value accretion opportunities.</li>
<li>Sibling separation in Hyosung Corp's split mandates shares cross-transfers. Hence, block deals among siblings are plausible.</li>
<li>This scenario resembles the case in December 2021 when LX Koo Bon-joon disposed of LG Corp shares through a block deal instead of a swap, causing an 8% drop.</li>
</ul>


Hyosung Corp's split diverges from usual Korean market splits. No tender offer is expected post-new holding company formation, reducing value accretion opportunities.
Sibling separation in Hyosung Corp's split mandates shares cross-transfers. Hence, block deals among siblings are plausible.
This scenario resembles the case in December 2021 when LX Koo Bon-joon disposed of LG Corp shares through a block deal instead of a swap, causing an 8% drop.


Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal

South Korea

Hyosung Corporation specializes in general trading businesses.  The Company also produces nylon yarns and other synthetic and chemical products such as PET films, PET bottles and polypropylene resins.  In addition, Hyosung contracts electrical construction and information systems and manufactures industrial machinery.

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Hyosung Corporation (004800 KS)

Hyosung Siblings' Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains

This post examines the off-market cross-transfers between the Hyosung siblings on August 13 and 14 and explores the imminent block deals for the...

Sanghyun Park

KOSPI200 Dec24 Rebal: 4 ADDs, 5 DELs, Big ADV on Small Stocks

The KOSPI 200 December 2024 rebal has been announced. We got 8/9 right. One was borderline. One false positive is an issue we are checking, but the...

Travis Lundy

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

There are 4 adds and 5 deletes for the KOSPI200 in December. 2 deletes are small surprises. There is a lot to trade in terms of ADV for some stocks...

Brian Freitas

Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

Hyosung Corp is spinning-off part of its businesses to a new entity. The surviving entity will maintain its KS200 membership while the new entity...

Brian Freitas

Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal

This post explores Hyosung Corp's split announced last Friday, emphasizing the trading implications stemming from this development.

Sanghyun Park

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