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

<ul>
<li>The definitions of the terms used in this designation rule have not been clearly disclosed. Even the words used in the original Korean text make interpreting quite tricky.</li>
<li>What confuses investors the most is the Short Selling Proportion, basically the ratio of a stock's short-selling to the market.</li>
<li>Amount Increase in Short Selling Transactions is also quite confusing. It is the ratio of a stock's short selling to its 40-day average daily short selling volume.</li>
</ul>


The definitions of the terms used in this designation rule have not been clearly disclosed. Even the words used in the original Korean text make interpreting quite tricky.
What confuses investors the most is the Short Selling Proportion, basically the ratio of a stock's short-selling to the market.
Amount Increase in Short Selling Transactions is also quite confusing. It is the ratio of a stock's short selling to its 40-day average daily short selling volume.


Overheated Short Selling Designation in Korea: Precise Definitions for the Confusing Terms

<ul>
<li>KMW is the most important name in this rebalancing. It will be a newcomer to the K-New Deal, replacing AfreecaTV for Top Three in INTERNET.</li>
<li>KMW's inflow will be very substantial at 8.60x ADTV, whereas AfreecaTV will suffer an outflow equivalent to 1.69x ADTV.</li>
<li>In addition, HLB will replace Hanmi Science, and Seojin System will take over Danal. Webzen also replaces Devsisters.</li>
</ul>


KMW is the most important name in this rebalancing. It will be a newcomer to the K-New Deal, replacing AfreecaTV for Top Three in INTERNET.
KMW's inflow will be very substantial at 8.60x ADTV, whereas AfreecaTV will suffer an outflow equivalent to 1.69x ADTV.
In addition, HLB will replace Hanmi Science, and Seojin System will take over Danal. Webzen also replaces Devsisters.


KRX K-New Deal September Rebalancing: Screening Results

<ul>
<li>This offering is a 100% stockholder allocation with forfeited shares going to the public. There will be 9.56M new shares at a capital increase of nearly 9%.</li>
<li>We should note that the largest shareholder may again do the same trick. He may block-deal a 1% stake and use the proceeds to participate in this offering.</li>
<li>A massive release volume and a 25% discount rate may cause a severe pricing distortion, leading to arb trading openings.</li>
</ul>


This offering is a 100% stockholder allocation with forfeited shares going to the public. There will be 9.56M new shares at a capital increase of nearly 9%.
We should note that the largest shareholder may again do the same trick. He may block-deal a 1% stake and use the proceeds to participate in this offering.
A massive release volume and a 25% discount rate may cause a severe pricing distortion, leading to arb trading openings.


HLB Capital Increase: Offering Terms & Trading Dynamics

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value &amp; Mkt Cap." </li>
<li>Starting this weekly, we include stocks in both KOSPI and KOSDAQ. All the stocks in KOSPI and KOSDAQ are ranked, adjusted for market cap and trading value. </li>
<li>Among the top 20 performers, NCSoft, Hyundai Motor, Kia Motors, Dohwa Engineering, DB Hitek, SK Telecom, and KT Corp were included. </li>
</ul>


This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value &amp; Mkt Cap." 
Starting this weekly, we include stocks in both KOSPI and KOSDAQ. All the stocks in KOSPI and KOSDAQ are ranked, adjusted for market cap and trading value. 
Among the top 20 performers, NCSoft, Hyundai Motor, Kia Motors, Dohwa Engineering, DB Hitek, SK Telecom, and KT Corp were included. 


Top 20 Best Performers in the Korean Stock Market (Week of 13 May)

<div class="content-highlight">
<p>The "K-Stop movement" made its first real move on <a href="https://www.smartkarma.com/entities/hlb-inc" target="_blank" data-smartkarma-citation="entities:16969:1" rel="noopener">HLB Inc (028300 KS) </a>on July 15th. The K-Stop movement refers to "Korean Game Stop movement," where many Korean retail investors have gathered together to actively protest and trade against the institutional investors that have put short positions on various Korean stocks. There are lots of interesting developments with the K-Stop movement so we will update on these key issues in this insight. </p>
<p><strong>Korea Stock Investors Association (한국주식투자자연합회) (KSIA) is the main sponsoring entity of this K-Stop Movement. On 1 August,<a href="https://www.news1.kr/articles/?4388150" target="_blank" rel="noopener"> KSIA</a> mentioned that it will once again pool the resources of the retail investors to target a specific company to buy on August 10th.</strong> The date was originally scheduled on August 15th but they decided to use August 10th instead due to the latter date being on a Sunday. </p>
</div><ul>
<li>In KOSDAQ, the top two potential stocks that KSIA may target on August 10th include <a href="https://www.smartkarma.com/entities/kmw-co-ltd" target="_blank" data-smartkarma-citation="entities:2834:1" rel="noopener">KMW Co Ltd (032500 KS)</a> and <a href="https://www.smartkarma.com/entities/seegene-inc" target="_blank" data-smartkarma-citation="entities:11483:1" rel="noopener">Seegene Inc (096530 KS)</a>. </li>
<li>In KOSPI, the top three potential stocks that KSIA may target on August 10th include <a href="https://www.smartkarma.com/entities/lotte-tour-development-co-ltd" target="_blank" data-smartkarma-citation="entities:5526:1" rel="noopener">Lotte Tour Development Co, Ltd. (032350 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>, and <a href="https://www.smartkarma.com/entities/shinpoong-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:7296:1" rel="noopener">Shinpoong Pharmaceutical (019170 KS)</a>.</li>
</ul>


The "K-Stop movement" made its first real move on HLB Inc (028300 KS) on July 15th. The K-Stop movement refers to "Korean Game Stop movement," where many Korean retail investors have gathered together to actively protest and trade against the institutional investors that have put short positions on various Korean stocks. There are lots of interesting developments with the K-Stop movement so we will update on these key issues in this insight. 
Korea Stock Investors Association (한국주식투자자연합회) (KSIA) is the main sponsoring entity of this K-Stop Movement. On 1 August, KSIA mentioned that it will once again pool the resources of the retail investors to target a specific company to buy on August 10th. The date was originally scheduled on August 15th but they decided to use August 10th instead due to the latter date being on a Sunday. 

In KOSDAQ, the top two potential stocks that KSIA may target on August 10th include KMW Co Ltd (032500 KS) and Seegene Inc (096530 KS). 
In KOSPI, the top three potential stocks that KSIA may target on August 10th include Lotte Tour Development Co, Ltd. (032350 KS), LG Display (034220 KS), and Shinpoong Pharmaceutical (019170 KS).


K-Stop Movement: Round 2 on August 10th - What Are the Targets?

South Korea

HLB Inc. operates cord blood banking and clinical demonstration service. The Company also produces industrial valves, and iron manufacturing machines.  The Company's subsidiaries are engaged in a wide range of businesses including manufacturing of electric field instruments, lifeboats and agent services.

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HLB Inc (028300 KS)

Overheated Short Selling Designation in Korea: Precise Definitions for the Confusing Terms

This post aims to explain Korea's overheated short-selling designation rules and provide precise definitions for the confusing terms.

Sanghyun Park

KRX K-New Deal September Rebalancing: Screening Results

This post presents the screening results of the KRX K-New Deal rebalancing in September, as the screening period ended at the end of July.

Sanghyun Park

HLB Capital Increase: Offering Terms & Trading Dynamics

This post details HLB's rights offer announced in a regulatory filing last Friday and discusses the trading dynamics that will likely unfold.

Sanghyun Park

Top 20 Best Performers in the Korean Stock Market (Week of 13 May)

This is the second weekly series on the "Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value & Mkt Cap." Starting this...

Douglas Kim

K-Stop Movement: Round 2 on August 10th - What Are the Targets?

On 1 August, Korea Stock Investors Association mentioned that it will once again pool the resources of the retail investors to target a specific...

Douglas Kim

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