Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>, <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, <a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> and <a href="https://www.smartkarma.com/entities/topsports-international" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International (6110 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a>, <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>. Shorts decreased in the Communication Services, Information Technology, Real Estate, Consumer Discretionary and Financials sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a>, <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp (6753 JP)</a>, <a href="https://www.smartkarma.com/entities/nagoya-railroad-co-ltd" target="_blank" data-smartkarma-citation="entities:8652:1" rel="noopener">Nagoya Railroad (9048 JP)</a> and <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/sanken-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:6073:1" rel="noopener">Sanken Electric (6707 JP)</a>, <a href="https://www.smartkarma.com/entities/anritsu-corp" target="_blank" data-smartkarma-citation="entities:3700:1" rel="noopener">Anritsu Corp (6754 JP)</a>, <a href="https://www.smartkarma.com/entities/sbi-holdings-inc" target="_blank" data-smartkarma-citation="entities:10928:1" rel="noopener">SBI Holdings (8473 JP)</a>, <a href="https://www.smartkarma.com/entities/thk-co-ltd" target="_blank" data-smartkarma-citation="entities:19572:1" rel="noopener">Thk Co Ltd (6481 JP)</a> and <a href="https://www.smartkarma.com/entities/nippon-yusen-kk" target="_blank" data-smartkarma-citation="entities:12285:1" rel="noopener">Nippon Yusen Kk (9101 JP)</a>. Shorts increased in the Real Estate, Industrials, Energy and Consumer Discretionary sectors, and decreased in the Financials sector.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/kumho-petro-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:2014:1" rel="noopener">Kumho Petro Chemical (011780 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a> and <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> while shorts were covered on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics Co., (207940 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-rotem-company" target="_blank" data-smartkarma-citation="entities:1554:1" rel="noopener">Hyundai Rotem Company (064350 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a> and <a href="https://www.smartkarma.com/entities/amorepacific-corp" target="_blank" data-smartkarma-citation="entities:20854:1" rel="noopener">Amorepacific Corp (090430 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/winbond-electronics-corp" target="_blank" data-smartkarma-citation="entities:9177:1" rel="noopener">Winbond Electronics (2344 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/elite-semiconductor-memory-technology" target="_blank" data-smartkarma-citation="entities:9373:1" rel="noopener">Elite Semiconductor Memory Technology (3006 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a> and <a href="https://www.smartkarma.com/entities/fubon-financial-holding-co" target="_blank" data-smartkarma-citation="entities:11869:1" rel="noopener">Fubon Financial Holding Co (2881 TT)</a>.     </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on HKEX (388 HK), Geely Auto (175 HK), Shenzhou Intl Group Holdings (2313 HK), China Mengniu Dairy Co (2319 HK) and Topsports International (6110 HK) while there was short covering on Kuaishou Technology (1024 HK), Xinyi Solar Holdings (968 HK), AIA Group Ltd (1299 HK), JD.com Inc. (9618 HK) and Alibaba Group (9988 HK). Shorts decreased in the Communication Services, Information Technology, Real Estate, Consumer Discretionary and Financials sectors.In Japan, stocks increased on Yaskawa Electric (6506 JP), ENEOS Holdings (5020 JP), Sharp Corp (6753 JP), Nagoya Railroad (9048 JP) and Shionogi &amp; Co (4507 JP) while there was short covering on Sanken Electric (6707 JP), Anritsu Corp (6754 JP), SBI Holdings (8473 JP), Thk Co Ltd (6481 JP) and Nippon Yusen Kk (9101 JP). Shorts increased in the Real Estate, Industrials, Energy and Consumer Discretionary sectors, and decreased in the Financials sector.In Korea, shorts increased on Kumho Petro Chemical (011780 KS), Hyundai Motor Co (005380 KS), Kakao Corp (035720 KS), NCSOFT Corp (036570 KS) and LG Display (034220 KS) while shorts were covered on Celltrion Inc (068270 KS), Samsung Biologics Co., (207940 KS), Hyundai Rotem Company (064350 KS), LG Household &amp; Health Care (051900 KS) and Amorepacific Corp (090430 KS).In Taiwan, shorts increased on TSMC (2330 TT), Winbond Electronics (2344 TT), Yang Ming Marine Transport (2609 TT), Elite Semiconductor Memory Technology (3006 TT) and Taiwan Cement (1101 TT) while shorts covered on Evergreen Marine Corp (2603 TT), Mediatek Inc (2454 TT), United Microelectronics Corp (2303 TT), Asia Cement (1102 TT) and Fubon Financial Holding Co (2881 TT).     

Asia Shorts: HKEX, Mengniu, Kuaishou, AIA, Sharp, Yaskawa, Kumho, HMC, Celltrion, TSMC, Yang Ming

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

Hyundai Engineering & Construction / Event-Driven

<h2>Offering overview</h2><p>A very unusual rights offering was recently announced in the Korean market.</p><div class="content-highlight"><p><strong>Hyundai E&amp;C announced this unusual capital increase, saying it would issue 2 million new preferred stocks.</strong></p></div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Overview"}'>Overview</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Issuer"}'><strong>Shares to be issued</strong></td>
<td data-sheets-value='{"1":2,"2":"Hyundai Engineering &amp; Construction Co. Preference Shares"}' data-sheets-formula='=googlefinance(R[1]C[0], "name")'><strong>Hyundai Engineering &amp; Construction Co. Preference Shares</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ticker"}'><strong>Ticker</strong></td>
<td data-sheets-value='{"1":2,"2":"000725"}' data-sheets-formula='="000725"'><strong>000725</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Target"}'>Target</td>
<td data-sheets-value='{"1":2,"2":"A public offering of forfeited shares after offering to stockholders"}'>A public offering of forfeited shares after offering to stockholders</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Transferability"}'>Transferability</td>
<td data-sheets-value='{"1":2,"2":"Renounceable"}'>Renounceable</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Volume"}'><strong>Volume</strong></td>
<td data-sheets-value='{"1":3,"3":2000000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>2,000,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary price"}'>Preliminary price</td>
<td data-sheets-value='{"1":3,"3":114500}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}'>₩114,500</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary value"}'>Preliminary value</td>
<td data-sheets-value='{"1":3,"3":229000000000}' data-sheets-numberformat='{"1":2,"2":"[$₩-412]#,##0","3":1}' data-sheets-formula="=R[-2]C[0]*R[-1]C[0]">₩229,000,000,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Oversubscription privilege"}'>Oversubscription privilege</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'>20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Banker"}'>Banker</td>
<td data-sheets-value='{"1":2,"2":"KIS &amp; Hyundai Motor Securities"}'>KIS &amp; Hyundai Motor Securities</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Although the capital increase ratio resulting from these 2 million shares remains at 1.79%, the offering volume is 20 times the size of the currently issued preferred stock.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Allocation"}'>Capital increase rate</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ordinary"}'>Ordinary - before rights offer</td>
<td data-sheets-value='{"1":3,"3":111355765}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance("000720", "shares")'>111,355,765</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Pref"}'><strong>Pref - before rights offer</strong></td>
<td data-sheets-value='{"1":3,"3":98856}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula='=googlefinance(R[-12]C[0], "shares")'><strong>98,856</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offer volume"}'><strong>Offer volume</strong></td>
<td data-sheets-value='{"1":3,"3":2000000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>2,000,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'><strong>Capital increase rate</strong></td>
<td data-sheets-value='{"1":3,"3":0.0179}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>1.79%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total shares after rights offer"}'>Total shares after rights offer</td>
<td data-sheets-value='{"1":3,"3":113454621}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[1]C[0]+R[2]C[0]">113,454,621</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Ordinary"}'>- Ordinary</td>
<td data-sheets-value='{"1":3,"3":111355765}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-6]C[0]">111,355,765</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Pref"}'>- Pref</td>
<td data-sheets-value='{"1":3,"3":2098856}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}' data-sheets-formula="=R[-6]C[0]+R[-5]C[0]">2,098,856</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>And what's even more shocking is that the discount rate applied when calculating the final offering price is a whopping 45%.</p><div class="content-highlight"><p><strong>For local rights offerings, a discount rate of 15-20% is usually applied. In contrast, this rights offering applies a discount rate of more than double the usual level.</strong></p></div><table class="table table-striped">
<colgroup>
<col width="400">
<col width="400">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Pricing"}'>Pricing</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"1st round"}'>1st round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 45%) / [1 + (1.79% × 45%)]"}' data-sheets-formula='="RP × (1 - "&amp;(R[11]C[0]*100&amp;"%")&amp;") / [1 + ("&amp;(R[12]C[0]*100&amp;"%"&amp;" × "&amp;(R[11]C[0]*100&amp;"%"&amp;")]"))'>RP × (1 - 45%) / [1 + (1.79% × 45%)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44438}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}' data-sheets-formula="=Terms!R[26]C[0]">2021. 08. 30</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights base price"}'>Ex-rights base price</td>
<td data-sheets-value='{"1":2,"2":"[RP + (1st × 1.79%)] / (1 + 1.79%)"}' data-sheets-formula='="[RP + (1st × "&amp;R[9]C[0]*100&amp;"%"&amp;")] / (1 + "&amp;R[9]C[0]*100&amp;"%"&amp;")"'>[RP + (1st × 1.79%)] / (1 + 1.79%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Previous close"}'>Previous close</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44440}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}' data-sheets-formula="=Terms!R[24]C[0]">2021. 09. 01</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"2nd round"}'>2nd round</td>
<td data-sheets-value='{"1":2,"2":"RP × (1 - 45%)"}' data-sheets-formula='="RP × (1 - "&amp;(R[5]C[0]*100&amp;"%")&amp;")"'>RP × (1 - 45%)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference price (RP)"}'>- Reference price (RP)</td>
<td data-sheets-value='{"1":2,"2":"Min [Close, Avg (Close, 1W VWAP)]"}'>Min [Close, Avg (Close, 1W VWAP)]</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44487}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[25]C[0]">2021. 10. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final"}'>Final</td>
<td data-sheets-value='{"1":2,"2":"Min (1st, 2nd)"}'>Min (1st, 2nd)</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - Reference date"}'>- Reference date</td>
<td data-sheets-value='{"1":3,"3":44487}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}' data-sheets-formula="=Terms!R[23]C[0]">2021. 10. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Discount rate"}'><strong>Discount rate</strong></td>
<td data-sheets-value='{"1":3,"3":0.45}'><strong>45.00%</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Capital increase rate"}'>Capital increase rate</td>
<td data-sheets-value='{"1":3,"3":0.0179}' data-sheets-formula="=Terms!R[4]C[0]">1.79%</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>In this rights offering, 20% will be allocated to the ESOP, and the remaining 80% will be allocated to shareholders.</p><div class="content-highlight"><p><strong>Of course, not only shareholders who own preferred stocks but also shareholders who own common stocks are given the same purchase rights. So the allocation ratio per share becomes 0.0143556.</strong></p></div><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Allocation"}'>Allocation</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Per-share allocation"}'><strong>Per-share allocation</strong></td>
<td data-sheets-value='{"1":3,"3":0.014355618328288066}' data-sheets-numberformat='{"1":2,"2":"#,##0.0000000","3":1}' data-sheets-formula="=R[7]C[0]/(R[-3]C[0]+R[-2]C[0])"><strong>0.0143556</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ESOP allocation"}'>ESOP allocation</td>
<td data-sheets-value='{"1":3,"3":400000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'>400,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'>- %</td>
<td data-sheets-value='{"1":3,"3":0.2}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-7]C[0]">20.00%</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder allocation"}'><strong>Stockholder allocation</strong></td>
<td data-sheets-value='{"1":3,"3":1600000}' data-sheets-numberformat='{"1":2,"2":"#,##0","3":1}'><strong>1,600,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":" - %"}'><strong>- %</strong></td>
<td data-sheets-value='{"1":3,"3":0.8}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}' data-sheets-formula="=R[-1]C[0]/R[-9]C[0]"><strong>80.00%</strong></td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The schedule is as follows. The first-round price is confirmed on Aug. 30, and this becomes the ceiling of the offering price. And since September 1 is the ex-date, the stock must be held by August 31 to be granted the subscription right. After that, the subscription rights will be traded for 5 trading days from October 1 to 8, and the final price will be confirmed on October 18. The new stock listing date is November 5.</p><table class="table table-striped">
<colgroup>
<col width="300">
<col width="300">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Timetable"}'>Timetable</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"BOD meeting"}'>BOD meeting</td>
<td data-sheets-value='{"1":3,"3":44400}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 07. 23</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Preliminary pricing"}'><strong>Preliminary pricing</strong></td>
<td data-sheets-value='{"1":3,"3":44438}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 08. 30</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Ex-rights date"}'><strong>Ex-rights date</strong></td>
<td data-sheets-value='{"1":3,"3":44440}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 09. 01</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Record date"}'>Record date</td>
<td data-sheets-value='{"1":3,"3":44441}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 09. 02</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade beginning"}'><strong>Subscription rights trade beginning</strong></td>
<td data-sheets-value='{"1":3,"3":44470}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 10. 01</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights trade ending"}'><strong>Subscription rights trade ending</strong></td>
<td data-sheets-value='{"1":3,"3":44477}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 10. 08</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Final pricing"}'>Final pricing</td>
<td data-sheets-value='{"1":3,"3":44487}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 10. 18</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Stockholder subscription"}'>Stockholder subscription</td>
<td data-sheets-value='{"1":3,"3":44490}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'>2021. 10. 21</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Payment"}'>Payment</td>
<td data-sheets-value='{"1":3,"3":44495}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'>2021. 10. 26</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'><strong>Listing</strong></td>
<td data-sheets-value='{"1":3,"3":44505}' data-sheets-numberformat='{"1":5,"2":"yyyy. mm. dd","3":1}'><strong>2021. 11. 05</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table>

Offering overviewA very unusual rights offering was recently announced in the Korean market.Hyundai E&amp;C announced this unusual capital increase, saying it would issue 2 million new preferred stocks.





Overview

Shares to be issued
Hyundai Engineering &amp; Construction Co. Preference Shares


Ticker
000725


Target
A public offering of forfeited shares after offering to stockholders


Transferability
Renounceable


Volume
2,000,000


Preliminary price
₩114,500


Preliminary value
₩229,000,000,000


Oversubscription privilege
20.00%


Banker
KIS &amp; Hyundai Motor Securities

Source: DART

Although the capital increase ratio resulting from these 2 million shares remains at 1.79%, the offering volume is 20 times the size of the currently issued preferred stock.





Capital increase rate

Ordinary - before rights offer
111,355,765


Pref - before rights offer
98,856


Offer volume
2,000,000


Capital increase rate
1.79%


Total shares after rights offer
113,454,621


- Ordinary
111,355,765


- Pref
2,098,856

Source: DART

And what's even more shocking is that the discount rate applied when calculating the final offering price is a whopping 45%.For local rights offerings, a discount rate of 15-20% is usually applied. In contrast, this rights offering applies a discount rate of more than double the usual level.





Pricing

1st round
RP × (1 - 45%) / [1 + (1.79% × 45%)]


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP, 1M VWAP)]


- Reference date
2021. 08. 30


Ex-rights base price
[RP + (1st × 1.79%)] / (1 + 1.79%)


- Reference price (RP)
Previous close


- Reference date
2021. 09. 01


2nd round
RP × (1 - 45%)


- Reference price (RP)
Min [Close, Avg (Close, 1W VWAP)]


- Reference date
2021. 10. 18


Final
Min (1st, 2nd)


- Reference date
2021. 10. 18


Discount rate
45.00%


Capital increase rate
1.79%

Source: DART

In this rights offering, 20% will be allocated to the ESOP, and the remaining 80% will be allocated to shareholders.Of course, not only shareholders who own preferred stocks but also shareholders who own common stocks are given the same purchase rights. So the allocation ratio per share becomes 0.0143556.





Allocation

Per-share allocation
0.0143556


ESOP allocation
400,000


- %
20.00%


Stockholder allocation
1,600,000


- %
80.00%

Source: DART

The schedule is as follows. The first-round price is confirmed on Aug. 30, and this becomes the ceiling of the offering price. And since September 1 is the ex-date, the stock must be held by August 31 to be granted the subscription right. After that, the subscription rights will be traded for 5 trading days from October 1 to 8, and the final price will be confirmed on October 18. The new stock listing date is November 5.





Timetable

BOD meeting
2021. 07. 23


Preliminary pricing
2021. 08. 30


Ex-rights date
2021. 09. 01


Record date
2021. 09. 02


Subscription rights trade beginning
2021. 10. 01


Subscription rights trade ending
2021. 10. 08


Final pricing
2021. 10. 18


Stockholder subscription
2021. 10. 21


Payment
2021. 10. 26


Listing
2021. 11. 05

Source: DART



Hyundai E&C's Unusual 1P Offering with a Shocking 45% Discount

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> and <a href="https://www.smartkarma.com/entities/fuyao-glass-industry-group-co-ltd" target="_blank" data-smartkarma-citation="entities:330:1" rel="noopener">Fuyao Glass Industry Group (3606 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> and <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a>. Shorts decreased in the Consumer Discretionary, Information Technology, Real Estate, Materials, Indsutrials and Financials sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a>, <a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> and <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp (6753 JP)</a>, <a href="https://www.smartkarma.com/entities/pigeon-corp" target="_blank" data-smartkarma-citation="entities:3294:1" rel="noopener">Pigeon Corp (7956 JP)</a>, <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a>, <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> and <a href="https://www.smartkarma.com/entities/kawasaki-heavy-industries" target="_blank" data-smartkarma-citation="entities:8790:1" rel="noopener">Kawasaki Heavy Industries (7012 JP)</a>. Shorts increased in the Health Care, Financials, Materials and Communication Services sectors while decreasing in the Consumer Discretionary and Real Estate sectors.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries" target="_blank" data-smartkarma-citation="entities:10155:1" rel="noopener">Hyundai Heavy Industries (009540 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-telecom-co-ltd-bbccd86c-474d-4a4d-946d-10e911a225a2" target="_blank" data-smartkarma-citation="entities:395:1" rel="noopener">SK Telecom (017670 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a>, <a href="https://www.smartkarma.com/entities/oci-co-ltd" target="_blank" data-smartkarma-citation="entities:1904:1" rel="noopener">Oci Co Ltd (010060 KS)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>. </p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a>, <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a>, <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a>, <a href="https://www.smartkarma.com/entities/quanta-computer-inc" target="_blank" data-smartkarma-citation="entities:2754:1" rel="noopener">Quanta Computer (2382 TT)</a> and <a href="https://www.smartkarma.com/entities/fitipower-integrated-technology-inc" target="_blank" data-smartkarma-citation="entities:8712:1" rel="noopener">Fitipower Integrated Technology (4961 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a>, <a href="https://www.smartkarma.com/entities/asia-cement-corp" target="_blank" data-smartkarma-citation="entities:15350:1" rel="noopener">Asia Cement (1102 TT)</a>, <a href="https://www.smartkarma.com/entities/elite-semiconductor-memory-technology" target="_blank" data-smartkarma-citation="entities:9373:1" rel="noopener">Elite Semiconductor Memory Technology (3006 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a> and <a href="https://www.smartkarma.com/entities/ta-chen-stainless-pipe-co-ltd" target="_blank" data-smartkarma-citation="entities:2519:1" rel="noopener">TA Chen Stainless Pipe (2027 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Kuaishou Technology (1024 HK), New Oriental Education &amp; Technology Group (9901 HK), Alibaba Health Information Technology (241 HK), Ping An Healthcare and Technology Company Limited (1833 HK) and Fuyao Glass Industry Group (3606 HK) while there was short covering on Alibaba Group (9988 HK), Tencent (700 HK), Wuxi Biologics (2269 HK), Galaxy Entertainment Group (27 HK) and Great Wall Motor (2333 HK). Shorts decreased in the Consumer Discretionary, Information Technology, Real Estate, Materials, Indsutrials and Financials sectors.In Japan, stocks increased on Takeda Pharmaceutical (4502 JP), Mizuho Financial Group (8411 JP), Kirin Holdings (2503 JP), KDDI Corp (9433 JP) and Nippon Steel Corporation (5401 JP) while there was short covering on Sharp Corp (6753 JP), Pigeon Corp (7956 JP), Matsumotokiyoshi Holdings Co., Ltd. (3088 JP), Shionogi &amp; Co (4507 JP) and Kawasaki Heavy Industries (7012 JP). Shorts increased in the Health Care, Financials, Materials and Communication Services sectors while decreasing in the Consumer Discretionary and Real Estate sectors.In Korea, shorts increased on LG Household &amp; Health Care (051900 KS), Hyundai Motor Co (005380 KS), HMM Co., Ltd. (011200 KS), Hyundai Heavy Industries (009540 KS) and SK Telecom (017670 KS) while shorts were covered on Samsung Electronics (005930 KS), LG Electronics (066570 KS), Oci Co Ltd (010060 KS), Naver Corp (035420 KS) and SK Hynix (000660 KS). In Taiwan, shorts increased on Novatek Microelectronics Corp (3034 TT), Mediatek Inc (2454 TT), Asustek Computer (2357 TT), Quanta Computer (2382 TT) and Fitipower Integrated Technology (4961 TT) while shorts covered on Yageo Corporation (2327 TT), Asia Cement (1102 TT), Elite Semiconductor Memory Technology (3006 TT), Yang Ming Marine Transport (2609 TT) and TA Chen Stainless Pipe (2027 TT).

Asia Shorts: Kuaishou, EDU, Fuyao, Galaxy, KDDI, Sharp, HMC, HMM, SK Tel, Naver, Novatek, Yageo

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

SGX Asia Currencies and Commodities Insights

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Capital Markets

Maruti Suzuki India / Equity Capital Markets

<p>In this Insight, we present commentary from our interactions with one of the largest dealers of <a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a> , Store Manager of Royal Enfield from <a href="https://www.smartkarma.com/entities/eicher-motors-ltd" target="_blank" data-smartkarma-citation="entities:18316:1" rel="noopener">Eicher Motors (EIM IN)</a> , Dealership owners of <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> and an Electric Vehicle (EV) of <a href="https://www.smartkarma.com/entities/greaves-cotton-ltd" target="_blank" data-smartkarma-citation="entities:11664:1" rel="noopener">Greaves Cotton (GRV IN)</a>. We also share anecdotal commentary that we have gathered about <a href="https://www.smartkarma.com/entities/tata-motors-ltd" target="_blank" data-smartkarma-citation="entities:216:1" rel="noopener">Tata Motors Ltd (TTMT IN)</a> .</p>
<div>
<div>
<h3>About India Channel Insight </h3>
</div>
</div>
<div>
<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.</p>
</div>

In this Insight, we present commentary from our interactions with one of the largest dealers of Maruti Suzuki India (MSIL IN) , Store Manager of Royal Enfield from Eicher Motors (EIM IN) , Dealership owners of Hyundai Motor Co (005380 KS) and an Electric Vehicle (EV) of Greaves Cotton (GRV IN). We also share anecdotal commentary that we have gathered about Tata Motors Ltd (TTMT IN) .


About India Channel Insight 



Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.


India Channel Insight | Maruti, Hyundai, Tata Motors, Eicher, Ola Electric

South Korea

Hyundai Motor Company manufactures, sells, and exports passenger cars, trucks, and commercial vehicles. The Company also sells various auto parts and operates auto repair service centers throughout South Korea. Hyundai Motor provides financial services through its subsidiaries.

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