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

Hanwha Systems Subscription Rights Trading Begins May 13: Should Aim at the First Day

HYBE Offering: Over-Subscription Allocation, Non-Float Change, & Trading Schedule

Hanwha Systems Offering: SO/Float Changes & Index Treatment

HYBE (Big Hit Ent) Rights Offer Presents a Nice Setup for a Classic Arb Trade

HYBE Sets a Ceiling for Offering Price at a Nicely Discounted Level for Arb Setup

Korea's New Short Selling Restriction to Close the Loophole for Arb Trading on a Rights Offer

Clepsydra Capital

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

Event-Driven

<p>HYBE subscription rights trading is in full action starting today. The price opened at ₩31,050. It fell to ₩ 30,000 and then soared to ₩34,450.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Subscription rights price movement"}'>Subscription rights price movement</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Opening"}'><strong>Opening</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":31050}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩31,050</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"High"}'>High</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":34450}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'>₩34,450</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Low"}'>Low</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":30000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'>₩30,000</td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>The current arb yield is 2.79% at a spot price of ₩239,500 and the ceiling offering price of ₩200,000, the 1st round price.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Arb trade yield"}'>Arb trade yield</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Subscription rights"}'><strong>Subscription rights</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":33000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}'><strong>₩33,000</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spot price"}'><strong>Spot price</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":239500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula='=googlefinance(Terms!R[0]C[0], "price")'><strong>₩239,500</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Offering price at the ceiling"}'>Offering price at the ceiling</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":200000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=Pricing!R[20]C[0]">₩200,000</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Arb trade yield"}'><strong>Arb trade yield</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.027896995708154508}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-2]C[0]-(R[-1]C[0]+R[-3]C[0]))/(R[-3]C[0]+R[-1]C[0])"><strong>2.79%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table><p>However, if you can manage to get a full 20% oversubscription, your arb trade yield will rise to 5.27%, again at the ceiling offering price of ₩200,000.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" rowspan="1" style="width: 724.167px;" data-sheets-value='{"1":2,"2":"Arb trade yield"}'>Arb trade yield at a full 20% oversubscription</td></tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Subscription rights at a full 120% oversubscription"}'><strong>Subscription rights at a full 20% oversubscription</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":27500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=33000/1.2"><strong>₩27,500</strong></td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Spot price"}'><strong>Spot price</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":239500}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[0]C[-3]"><strong>₩239,500</strong></td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Offering price at the ceiling"}'>Offering price at the ceiling</td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":200000}' data-sheets-numberformat='{"1":4,"2":"[$₩]#,##0"}' data-sheets-formula="=R[0]C[-3]">₩200,000</td>
</tr>
<tr>
<td style="width: 369.167px;" data-sheets-value='{"1":2,"2":"Arb trade yield"}'><strong>Arb trade yield</strong></td>
<td style="text-align: right; width: 334.167px;" data-sheets-value='{"1":3,"3":0.05274725274725275}' data-sheets-numberformat='[null,3,"0.00%",1]' data-sheets-formula="=(R[-2]C[0]-(R[-1]C[0]+R[-3]C[0]))/(R[-3]C[0]+R[-1]C[0])"><strong>5.27%</strong></td>
</tr>
<tr><td colspan="2" rowspan="1" style="width: 724.167px;" data-sheets-value='{"1":2,"2":"Source: KRX"}'>Source: KRX</td></tr>
</tbody>
</table>

HYBE subscription rights trading is in full action starting today. The price opened at ₩31,050. It fell to ₩ 30,000 and then soared to ₩34,450.





Subscription rights price movement

Opening
₩31,050


High
₩34,450


Low
₩30,000

Source: KRX

The current arb yield is 2.79% at a spot price of ₩239,500 and the ceiling offering price of ₩200,000, the 1st round price.





Arb trade yield

Subscription rights
₩33,000


Spot price
₩239,500


Offering price at the ceiling
₩200,000


Arb trade yield
2.79%

Source: KRX

However, if you can manage to get a full 20% oversubscription, your arb trade yield will rise to 5.27%, again at the ceiling offering price of ₩200,000.





Arb trade yield at a full 20% oversubscription

Subscription rights at a full 20% oversubscription
₩27,500


Spot price
₩239,500


Offering price at the ceiling
₩200,000


Arb trade yield
5.27%

Source: KRX



HYBE Subscription Rights at a Decent Arb Yield: Why Not Trading It