UBS Sees Premium in SK Hynix US Depositary Receipts Over Seoul Shares
UBS•UBS Group AG advised clients to purchase SK Hynix’s newly planned US depositary receipts and simultaneously sell its Seoul-listed shares, forecasting the DRs to trade at a premium. The bank highlighted potential price disparity driven by limited US issuance and strong investor demand.
1. UBS Issues Dual-Market Trade Call
UBS Group AG recommended that clients buy upcoming SK Hynix US depositary receipts while selling shares on the Korea Exchange, citing an expected premium on the new DRs. The advisory note emphasized a view that constrained supply in the US and elevated institutional demand will drive a valuation gap between the two listings.
2. Premium Drivers and Arbitrage Opportunity
The bank forecasts that robust global appetite and limited issuance will push US depositary receipts above local stock valuations, presenting an arbitrage window. Traders could capitalize on the spread by executing simultaneous buy orders in New York and sell orders in Seoul to capture the anticipated price differential.
