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

<ul>
<li>Not much juice at ex-rights — price move’s small, and shorting’s risky with recall risk and having to compensate the lender for lost rights.</li>
<li>Some locals chase rights instead, but it’s not really a go-to trade with all the cost/efficiency uncertainty.</li>
<li>First round price pre–ex-rights sets the floor for arb margins and anchors rights pricing once they start trading — key level to keep in the playbook.</li>
</ul>


Not much juice at ex-rights — price move’s small, and shorting’s risky with recall risk and having to compensate the lender for lost rights.
Some locals chase rights instead, but it’s not really a go-to trade with all the cost/efficiency uncertainty.
First round price pre–ex-rights sets the floor for arb margins and anchors rights pricing once they start trading — key level to keep in the playbook.


Clearing Up the Confusion: Ex-Rights Trading in Korean Rights Offerings

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Samsung SDI (006400 KS) has lowered the rights offering capital raise amount by 14% to 1.7 trillion won, mainly due to the recent carnage in the global equity markets. </li>
<li>The expected rights offering price has been lowered to 146,200 won, which is 14.9% lower than current price.</li>
<li>We remain negative on Samsung SDI's rights offering capital raise mainly due to shares dilution risk. We also remain concerned that the weak demand for EVs globally could last longer.</li>
</ul>


Samsung SDI (006400 KS) has lowered the rights offering capital raise amount by 14% to 1.7 trillion won, mainly due to the recent carnage in the global equity markets. 
The expected rights offering price has been lowered to 146,200 won, which is 14.9% lower than current price.
We remain negative on Samsung SDI's rights offering capital raise mainly due to shares dilution risk. We also remain concerned that the weak demand for EVs globally could last longer.


Samsung SDI: Rights Offering Capital Raise Amount Lowered by 14% to 1.7 Trillion Won

<ul>
<li>Samsung SDI’s rights offering is locked in and even accelerated. Hanwha Aerospace awaits FSS approval, but a pullback is unlikely, with no major red flags seen by regulators.</li>
<li>With a four-week gap, supply pressure eases, reducing overhang concerns. This shift in dynamics impacts stock rights pricing and is key for any arb setup.</li>
<li>The wider schedule gap between deals boosts lenders' flexibility, increasing the likelihood of a stronger share recall. This makes for a solid trade setup, targeting recall-driven price action.</li>
</ul>


Samsung SDI’s rights offering is locked in and even accelerated. Hanwha Aerospace awaits FSS approval, but a pullback is unlikely, with no major red flags seen by regulators.
With a four-week gap, supply pressure eases, reducing overhang concerns. This shift in dynamics impacts stock rights pricing and is key for any arb setup.
The wider schedule gap between deals boosts lenders' flexibility, increasing the likelihood of a stronger share recall. This makes for a solid trade setup, targeting recall-driven price action.


Clearing up FSS Review of Samsung SDI & Hanwha Aerospace: Watch for Ramped-Up Recall Pressure

<ul>
<li>Korea’s rights issues offer a clean arb setup—track stock rights vs. spot price, with first price as a cap, and lock in predictable entry vs. exit costs.</li>
<li>Aggressive locals skip hedging, betting the discount holds between final pricing and listing. History backs it, but it’s a case-by-case call—not a blanket recommendation.</li>
<li>Samsung SDI and Hanwha Aerospace’s KRW 5.5T raise is massive, likely flooding stock rights into the market—prime setup for arb plays.</li>
</ul>


Korea’s rights issues offer a clean arb setup—track stock rights vs. spot price, with first price as a cap, and lock in predictable entry vs. exit costs.
Aggressive locals skip hedging, betting the discount holds between final pricing and listing. History backs it, but it’s a case-by-case call—not a blanket recommendation.
Samsung SDI and Hanwha Aerospace’s KRW 5.5T raise is massive, likely flooding stock rights into the market—prime setup for arb plays.


Revisiting Korea’s Local Rights Issue Arb Setup

<ul>
<li>The discount’s tight, but this near-2-trillion-won raise is a rare mega-deal in Korea, despite the issuance ratio below 20%.</li>
<li>Samsung Electronics is in for 150 billion won, but plenty of supply remains. A smooth clearance? Unlikely. This could drive stock rights costs lower as price discovery unfolds.</li>
<li>The optimal approach is to wait for a decline in rights prices and assess hedge costs through single stock futures (or TRS, if doable), given the shorting restrictions.</li>
</ul>


The discount’s tight, but this near-2-trillion-won raise is a rare mega-deal in Korea, despite the issuance ratio below 20%.
Samsung Electronics is in for 150 billion won, but plenty of supply remains. A smooth clearance? Unlikely. This could drive stock rights costs lower as price discovery unfolds.
The optimal approach is to wait for a decline in rights prices and assess hedge costs through single stock futures (or TRS, if doable), given the shorting restrictions.


Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market

South Korea

Samsung SDI Co., Ltd. specializes in developing Lithium Ion Battery (LIB) technology.  The Company also manufactures cathode ray tubes (CRTs) for televisions and computer monitors.  Samsung SDI also produces liquid crystal display (LCD) components and rechargeable batteries for cellular phones , personal digital assistants (PDAs), Energy Storage Systems and solar panels.

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Samsung SDI (006400 KS)

Clearing Up the Confusion: Ex-Rights Trading in Korean Rights Offerings

Korea’s rights offerings differ from global norms, causing noise in arb trading. Using the recent Samsung SDI deal as a case study, I’ll focus on...

Sanghyun Park

Samsung SDI: Rights Offering Capital Raise Amount Lowered by 14% to 1.7 Trillion Won

Samsung SDI has lowered the rights offering capital raise amount by 14% to 1.7 trillion won. The expected rights offering price has been lowered to...

Douglas Kim

Clearing up FSS Review of Samsung SDI & Hanwha Aerospace: Watch for Ramped-Up Recall Pressure

This post clears up the confusion around the FSS’s intensive review of Samsung SDI and Hanwha Aerospace’s rights offerings: Keep an eye on the...

Sanghyun Park

Revisiting Korea’s Local Rights Issue Arb Setup

This post revisits Korea’s rights issue arb setup—fine-tuning the playbook and spotting the best angles to play the spread.

Sanghyun Park

Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market

Post-close, an FSS insider leaked that SDI is the first test case for the new rights issue review system. Starting Monday, the FSS will scrutinize...

Sanghyun Park

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