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

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

<ul>
<li>Holdco price was up 6.92%. Heavy price is pegged to Holdco price. Heavy was also up 5.90%. What is noteworthy is Heavy's price gain was a little less than Holdco. So, we now have a '<em>mini</em>' spread on Holdco/Heavy at 3.81%</li>
<li>Local arb traders jumped in and have shorted a nearly 60K Holdco shares. They've scooped up 54K Heavy shares. This is pretty much in line with the Holdco/Heavy swap ratio of 0.9.</li>
<li>As for proration risk, if Cho Hyun-sang doesn't tender his Heavy shares, up to 16% will be left for arb trade. We still have enough room for arb trade.</li>
</ul>


Holdco price was up 6.92%. Heavy price is pegged to Holdco price. Heavy was also up 5.90%. What is noteworthy is Heavy's price gain was a little less than Holdco. So, we now have a 'mini' spread on Holdco/Heavy at 3.81%
Local arb traders jumped in and have shorted a nearly 60K Holdco shares. They've scooped up 54K Heavy shares. This is pretty much in line with the Holdco/Heavy swap ratio of 0.9.
As for proration risk, if Cho Hyun-sang doesn't tender his Heavy shares, up to 16% will be left for arb trade. We still have enough room for arb trade.


Hyosung Tender Arb Trade: Spread at 3.81% & Proration Risk Still Seems Low

<ul>
<li>Hyosung Holdings tendering price is finalized at ₩48,850. We now have all the swap ratios fixed. Tendering will begin this Wednesday (Nov 28) and runs until Dec 17. At the last Friday closing, we had a bit of spread on <a href="https://www.smartkarma.com/entities/27750" target="_blank" data-smartkarma-citation="entities:27750:1">Hyosung Heavy Industries Corp (298040 KS)</a> at 3.55%. But it is gone early this morning. Now, we have no spread. Heavy is at 1.64%.</li>
<li>There have been some arb actions led by local brokerages on Holdings and Heavy. It wasn't as aggressively as expected. But shorting on Holdings seen during the pricing period is still worthy of note. Some 70K shares were shorted. this represents 6% of total potential arb trades.</li>
<li>This may suggest that quite an aggressive arb action will be seen during the tendering period. Holdings dividend yield still stands at 8+%. There is a chance that this 8+% dividend yield will lead to a '<em>mini</em>' overshooting on Holdings. This'd be a moment that we do not want to miss out on.</li>
</ul>


Hyosung Holdings tendering price is finalized at ₩48,850. We now have all the swap ratios fixed. Tendering will begin this Wednesday (Nov 28) and runs until Dec 17. At the last Friday closing, we had a bit of spread on Hyosung Heavy Industries Corp (298040 KS) at 3.55%. But it is gone early this morning. Now, we have no spread. Heavy is at 1.64%.
There have been some arb actions led by local brokerages on Holdings and Heavy. It wasn't as aggressively as expected. But shorting on Holdings seen during the pricing period is still worthy of note. Some 70K shares were shorted. this represents 6% of total potential arb trades.
This may suggest that quite an aggressive arb action will be seen during the tendering period. Holdings dividend yield still stands at 8+%. There is a chance that this 8+% dividend yield will lead to a 'mini' overshooting on Holdings. This'd be a moment that we do not want to miss out on.


South Korea

Hyosung Advanced Materials Corporation operates as an advanced materials production company. The Company manufactures and sells high-strength industrial yarns, fabric, steel wire materials, and other products. Hyosung Advanced Materials markets its products worldwide.

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Hyosung Advanced Materials (298050 KS)

Hyosung Tender Arb Trade: Spread at 3.81% & Proration Risk Still Seems Low

Holdco price was up 6.92%. Heavy price is pegged to Holdco price. Heavy was also up 5.90%. What is noteworthy is Heavy's price gain was a little...

Sanghyun Park

Hyosung Tender Offer: Arb Trading Status

Hyosung Holdings tendering price is finalized at ₩48,850. We now have all the swap ratios fixed. Tendering will begin this Wednesday (Nov 28) and...

Sanghyun Park

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