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>Today's FSS briefing warned Choi, favoring MBK. It looks likely Korea Zinc will retract the rights offering, or we might see a rare showdown with the FSS.</li>
<li>Will Korea Zinc's stock rally? Uncertain. The recent price jump was driven mainly by short squeezes. Volatility seems unlikely now with many shorts cleared out.</li>
<li>We should watch the shareholder vote, as open market buying continues, keeping Korea Zinc's stock tight. We should expect potential swings due to passive outflows.</li>
</ul>


Today's FSS briefing warned Choi, favoring MBK. It looks likely Korea Zinc will retract the rights offering, or we might see a rare showdown with the FSS.
Will Korea Zinc's stock rally? Uncertain. The recent price jump was driven mainly by short squeezes. Volatility seems unlikely now with many shorts cleared out.
We should watch the shareholder vote, as open market buying continues, keeping Korea Zinc's stock tight. We should expect potential swings due to passive outflows.


FSS Briefing on Korea Zinc: Likely to Retract Rights Offering; Set up Trades for Passive Outflows

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

<ul>
<li>12 ETFs (9 passive and 3 active) and 1 ETN tracking the Korea Value-Up Index will start trading on the KRX on 4 November.</li>
<li>At listing, the combined AUM across the 13 products is KRW 511bn (US$370m). So not a lot of impact on the stocks in the index.</li>
<li>The expectation is that there will be a lot of money that starts to track the index after the ETF listing. Looking at Japan, that is not a success story.</li>
</ul>


12 ETFs (9 passive and 3 active) and 1 ETN tracking the Korea Value-Up Index will start trading on the KRX on 4 November.
At listing, the combined AUM across the 13 products is KRW 511bn (US$370m). So not a lot of impact on the stocks in the index.
The expectation is that there will be a lot of money that starts to track the index after the ETF listing. Looking at Japan, that is not a success story.


Korea Value-Up ETFs: Listing on 4 Nov with US$370m AUM

<ul>
<li>A unique clause caps any single subscriber, including related parties, to 3% of the total issuance, or 111,979 shares, limiting MBK and Choi’s camp.</li>
<li>While there are legal risks regarding breach of duty, the capital raise is solid and unlikely to face immediate shutdown despite potential court challenges from MBK.</li>
<li>There are trading opportunities as 20% of shares are newly issued, potentially opening the door for MBK's tender offer and attracting new shareholders, including arb hunters.</li>
</ul>


A unique clause caps any single subscriber, including related parties, to 3% of the total issuance, or 111,979 shares, limiting MBK and Choi’s camp.
While there are legal risks regarding breach of duty, the capital raise is solid and unlikely to face immediate shutdown despite potential court challenges from MBK.
There are trading opportunities as 20% of shares are newly issued, potentially opening the door for MBK's tender offer and attracting new shareholders, including arb hunters.


Breaking Down the Details of Korea Zinc’s Shocking Capital Raise

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Korea Zinc announced that it has secured 9.85% of its own shares through a public offering. Bain Capital also secured an additional 1.41% stake in Korea Zinc.</li>
<li>After this tender offer, MBK/Young Poong alliance still has a slight advantage. The fight for the control of Korea Zinc will likely be determined at the AGM in spring, 2025.</li>
<li>For longer term investors (with investment horizon of 1 year or more), the current share price of Korea Zinc looks overly stretched. </li>
</ul>


Korea Zinc announced that it has secured 9.85% of its own shares through a public offering. Bain Capital also secured an additional 1.41% stake in Korea Zinc.
After this tender offer, MBK/Young Poong alliance still has a slight advantage. The fight for the control of Korea Zinc will likely be determined at the AGM in spring, 2025.
For longer term investors (with investment horizon of 1 year or more), the current share price of Korea Zinc looks overly stretched. 


Korea Zinc: Increased Volatility in Share Price Post Korea Zinc's Tender Offer Results

<ul>
<li>There's still 13.67% of neutral votes up for grabs, sparking market chatter about a fresh tender. But Choi is focusing on reviving voting rights for treasury shares.</li>
<li>MBK stated today that Korea Zinc's 9.85% treasury shares might not be canceled and could be sold to employee stock ownership plans (ESOPs).</li>
<li>MBK may ramp up open market buying sooner and more aggressively than expected, likely already impacting Korea Zinc's stock price starting today.</li>
</ul>


There's still 13.67% of neutral votes up for grabs, sparking market chatter about a fresh tender. But Choi is focusing on reviving voting rights for treasury shares.
MBK stated today that Korea Zinc's 9.85% treasury shares might not be canceled and could be sold to employee stock ownership plans (ESOPs).
MBK may ramp up open market buying sooner and more aggressively than expected, likely already impacting Korea Zinc's stock price starting today.


Korea Zinc's Buyback Results and Price Actions from Potential Sale of 9.85% Treasury to ESOP

South Korea

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

Price Gauge
52-week Range	0.00 - 0.00
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Korea Zinc (010130 KS)

FSS Briefing on Korea Zinc: Likely to Retract Rights Offering; Set up Trades for Passive Outflows

This post covers today’s FSS briefing on the Korea Zinc rights offering and explores the reasons behind the likely cancellation. It also highlights...

Sanghyun Park

Korea Value-Up ETFs: Listing on 4 Nov with US$370m AUM

12 ETFs (9 passive and 3 active) and 1 ETN tracking the Korea Value-Up Index will start trading on the KRX on 4 November. Total assets at launch...

Brian Freitas

Breaking Down the Details of Korea Zinc’s Shocking Capital Raise

This post dives into the details of Korea Zinc’s shocking capital raise announced this morning and breaks down what it all means from a trading...

Sanghyun Park

Korea Zinc's Buyback Results and Price Actions from Potential Sale of 9.85% Treasury to ESOP

This post covers Korea Zinc's buyback tender results and touches on stock price actions likely driven by the potential sale of the 9.85% treasury...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

FSS Briefing on Korea Zinc: Likely to Retract Rights Offering; Set up Trades for Passive Outflows

This post covers today’s FSS briefing on the Korea Zinc rights offering and explores the reasons behind the likely cancellation. It also highlights...

Sanghyun Park

Korea Value-Up ETFs: Listing on 4 Nov with US$370m AUM

12 ETFs (9 passive and 3 active) and 1 ETN tracking the Korea Value-Up Index will start trading on the KRX on 4 November. Total assets at launch...

Brian Freitas

Breaking Down the Details of Korea Zinc’s Shocking Capital Raise

This post dives into the details of Korea Zinc’s shocking capital raise announced this morning and breaks down what it all means from a trading...

Sanghyun Park

Korea Zinc: Increased Volatility in Share Price Post Korea Zinc's Tender Offer Results

Korea Zinc announced that it has secured 9.85% of its own shares through a public offering. Bain Capital also secured an additional 1.41% stake in...

Douglas Kim

Korea Zinc's Buyback Results and Price Actions from Potential Sale of 9.85% Treasury to ESOP

This post covers Korea Zinc's buyback tender results and touches on stock price actions likely driven by the potential sale of the 9.85% treasury...

Sanghyun Park