In today’s briefing:
- Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures
- Korea Zinc Raises Share Buyback and Tender Offer Price to 890,000 Won
Another Play to Consider: Spread Trading Korea Zinc Single-Stock Futures
- Another play is spread trading Korea Zinc single-stock futures: go long on the front-month and short on the farther-out contract to profit from price convergence.
- The key is when longer-dated futures’ volume will rise and if the basis difference with front-month futures will create arbitrage opportunities. November’s volume seems more for hedging than arbitrage.
- MBK is likely to launch a second tender offer, potentially extending the spread trading timeline and giving us more chances to hit sweet spots.
Korea Zinc Raises Share Buyback and Tender Offer Price to 890,000 Won
- Korea Zinc raised the share buyback and tender offer price from 830,000 won to 890,000 won. Korea Zinc’s share price closed up by only 0.6% today to 794,000 won.
- As a result, the amount of capital involved in this share buyback and tender offer would increase from 2.7 trillion won to 3.2 trillion won.
- Despite higher share buyback/tender offer of Korea Zinc by Choi family, we believe that this fight for the control of Korea Zinc is increasingly in favor of MBK/Jang family.
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