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

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

Doosan Infracore Announces a Rights Offering Worth 70% of Its Market Cap

Yes, We Can Short Doosan Infracore for Arb Setup Even Now with Offering Pre-Announcement

Doosan Infracore Rights Offer Walkthrough & Thoughts on Arb Trading Setups

Doosan Split/Merger: Infracore in Overshooting

How Would We Capitalize on a Massive Discount Present on Doosan Infracore Business Unit?

Declining Shorts for Doosan Infracore & A Big Jump in Shorts for Doosan Heavy Industries

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>Doosan Infracore's stock trading suspension date is June 29. it's next Tuesday. So next Monday is the last trading day before the trading suspension.</p><table class="table table-striped">
<colgroup>
<col width="200">
<col width="200">
</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":"Trade suspension (Doosan Infracore)"}'><strong>Trade suspension (Doosan Infracore)</strong></td>
<td data-sheets-value='{"1":2,"2":"It begins on June 29 and runs until July 20"}'><strong>It begins on June 29 and runs until July 20</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Listing"}'><strong>Listing</strong></td>
<td data-sheets-value='{"1":3,"3":44398}' data-sheets-numberformat='{"1":5,"2":"yyyy. m. d","3":1}'><strong>July 21</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>The KRX announced the corporate action for the spin-off and re-listing of Doosan Infracore as follows. <strong>The KRX confirmed that Doosan Infracore's surviving entity, the 0.31 portion of the current Infracore, will remain in the KOSPI 200.</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/215/213/original/Screen+Shot+2021-06-24+at+8.31.26+PM.png?1624581101" class="editor-image img-responsive" data-smartkarma-image-id="215213"></figure></section><div>
<p>Then, the specific steps of corporate action due to the equity spinoff are as follows.</p>
<p>Doosan Infracore's market capitalization on the last trading day before the suspension will be applied in index calculation during the June 29~July 20 suspension period AND the first trading day of the trading resumption, July 21.</p>
</div><div><p><strong>On the following trading day (July 22), the index calculation shares decrease by the number of split shares. As a result, the market capitalization also decreases by the difference between the capitalizations before and after the spinoff.</strong></p></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/215/215/original/1.png?1624581217" class="editor-image img-responsive" data-smartkarma-image-id="215215"></figure></section><p><strong>So technically speaking,</strong></p>
<ul>
<li>Those passive funds systematically tracking the KOSPI 200, which are local ETFs and index funds estimated at approximately ₩20T, will dispose of all the Doosan Infracore shares <strong>at the close on June 28</strong>.</li>
<li>
<strong>At the close on July 21</strong>, they will repurchase Doosan Infracore by the market cap proportional to the number of relisted stocks.</li>
</ul>
<p><strong>On the other hand,</strong></p>
</div><div><p><strong>Doosan Heavy Industries, another KOSPI 200 constituent, will see an increase in its number of index calculation shares by the KRX on the listing day of new shares, July 21.</strong></p></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/215/216/original/2.png?1624582408" class="editor-image img-responsive" data-smartkarma-image-id="215216"></figure></section><p>The KRX has not yet announced an increase in the number of shares for Doosan Heavy Industries. Unlike Doosan Infracore, Doosan Heavy Industries &amp; Construction does not have a stock trading suspension period, so it is highly likely to be disclosed the week before the re-listing on July 21.</p>
<p><strong>Then, technically speaking, again</strong></p>
<ul><li>Those passive funds systematically tracking the KOSPI 200 will buy additional shares (number of merged shares) of Doosan Heavy Industries at the cost on <strong>July 20</strong>.</li></ul>
</div>

Doosan Infracore's stock trading suspension date is June 29. it's next Tuesday. So next Monday is the last trading day before the trading suspension.





Timetable

Trade suspension (Doosan Infracore)
It begins on June 29 and runs until July 20


Listing
July 21

Source: DART

The KRX announced the corporate action for the spin-off and re-listing of Doosan Infracore as follows. The KRX confirmed that Doosan Infracore's surviving entity, the 0.31 portion of the current Infracore, will remain in the KOSPI 200.
Then, the specific steps of corporate action due to the equity spinoff are as follows.
Doosan Infracore's market capitalization on the last trading day before the suspension will be applied in index calculation during the June 29~July 20 suspension period AND the first trading day of the trading resumption, July 21.
On the following trading day (July 22), the index calculation shares decrease by the number of split shares. As a result, the market capitalization also decreases by the difference between the capitalizations before and after the spinoff.
So technically speaking,

Those passive funds systematically tracking the KOSPI 200, which are local ETFs and index funds estimated at approximately ₩20T, will dispose of all the Doosan Infracore shares at the close on June 28.

At the close on July 21, they will repurchase Doosan Infracore by the market cap proportional to the number of relisted stocks.

On the other hand,
Doosan Heavy Industries, another KOSPI 200 constituent, will see an increase in its number of index calculation shares by the KRX on the listing day of new shares, July 21.
The KRX has not yet announced an increase in the number of shares for Doosan Heavy Industries. Unlike Doosan Infracore, Doosan Heavy Industries &amp; Construction does not have a stock trading suspension period, so it is highly likely to be disclosed the week before the re-listing on July 21.
Then, technically speaking, again
Those passive funds systematically tracking the KOSPI 200 will buy additional shares (number of merged shares) of Doosan Heavy Industries at the cost on July 20.


Hyundai Construction Equipment (267270 KS)

Doosan Infracore Rebalancing Trading on June 28 & Outright Short-Selling Opportunity

HD Hyundai Infracore

Doosan Infracore Rebalancing Trading on June 28 & Outright Short-Selling Opportunity