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

LS Electric Co., Ltd. manufactures and distributes electrical power equipment. The Company produces smart power equipment, smart automation equipment, smart railway equipment, and other related products. LS Electric also develops smart grid, micro grid, energy storage systems, and metal products.

<ul>
<li>Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.</li>
<li>They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.</li>
<li>Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.</li>
</ul>


Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.


How to Clean Up Korea’s Borrowing Balance Stats

Equity Capital Markets

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.

<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

Index Rebalance

VIOL Co., Ltd. manufactures and distributes medical equipment. The Company produces sylfirms, scarlets, skinstamps, and other related products. VIOL markets its products worldwide.

<ul>
<li>HLB Life Science faces delisting if it stays in ATTENTION for four years or gets a disclaimer in an audit—barring surprises, there's still runway before it’s a real threat.</li>
<li>HLB Inc getting ATTENTION in May looks likely, as KRX factors in frequent correction disclosures—HLB’s history with Rivoceranib filings and the failed FDA bid add to the risk.</li>
<li>If HLB Inc. gets ATTENTION in May and drops from KOSDAQ 150, VIOL (335890 KS) steps in—worth positioning ahead of late April.</li>
</ul>


HLB Life Science faces delisting if it stays in ATTENTION for four years or gets a disclaimer in an audit—barring surprises, there's still runway before it’s a real threat.
HLB Inc getting ATTENTION in May looks likely, as KRX factors in frequent correction disclosures—HLB’s history with Rivoceranib filings and the failed FDA bid add to the risk.
If HLB Inc. gets ATTENTION in May and drops from KOSDAQ 150, VIOL (335890 KS) steps in—worth positioning ahead of late April.


Detailing KRX Market Alerts & Passive Flow Plays

Korea Stock Exchange Kospi Index / Event-Driven

The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The Index was developed with a base value of 100 as of January 4, 1980. Note: The preferred shares are excluded in calculating the KOSPI Index from June 14, 2002. 

Korea Stock Exchange Kospi Index (KOSPI INDEX)

<ul>
<li>Today’s update clarifies which brokers are fully linked to NSDS, giving them an edge in short-selling speed and flexibility, while others face more execution constraints.</li>
<li>This leads to a clear execution risk gap, requiring traders to factor in trade efficiency differences based on their broker.</li>
<li>With lower short-selling restriction triggers, liquidity and short-covering dynamics will shift, requiring traders to reassess market impact and adjust strategies accordingly.</li>
</ul>


Today’s update clarifies which brokers are fully linked to NSDS, giving them an edge in short-selling speed and flexibility, while others face more execution constraints.
This leads to a clear execution risk gap, requiring traders to factor in trade efficiency differences based on their broker.
With lower short-selling restriction triggers, liquidity and short-covering dynamics will shift, requiring traders to reassess market impact and adjust strategies accordingly.


Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.

Hanwha Aerospace / Equity Capital Markets

Hanwha Aerospace Co., Ltd. operates as an aircraft parts manufacturing company. The Company produces and sells aircraft gas turbine engine products, aircraft compressors, low pressure turbines, and other products. Hanwha Aerospace markets its products worldwide.

<ul>
<li>Market sees this as an M&amp;A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.</li>
<li>Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.</li>
<li>The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.</li>
</ul>


Market sees this as an M&amp;A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.


Hanwha Aerospace’s Monster Raise: Checking Key Angles

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

Sanghyun Park
Korea / Special Sits, Pairs, Index Rebalancing
• Clepsydra Capital

How to Clean Up Korea’s Borrowing Balance Stats

This post looks at how to clean up the borrowing balance stats and filter out noise to make the stats actionable for our trades.

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

Detailing KRX Market Alerts & Passive Flow Plays

This post provides a detailed breakdown of KRX market alert rules and examines key names that could see meaningful passive flow impacts.

Sanghyun Park

Korea’s FSC Just Dropped the Final Playbook on the Full Restart of Short Selling.

Korea’s FSC just rolled out the final rulebook for the full-scale comeback of short selling. Here’s a breakdown of all the key details we traders...

Sanghyun Park

Hanwha Aerospace’s Monster Raise: Checking Key Angles

Hanwha Aerospace’s monster rights issue—breaking it down from key angles, sizing up the market impact, and spotting where the real trading setups...

Sanghyun Park