Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> has lost 41% of its value since its peak 1 month ago, a pretty dramatic correction.</li>
<li>No need to state the obvious, 5 weeks down, the stock is ultra-oversold, it should rebound soon but the real question is:how far can the rebound rally go?
</li>
<li>According to our model the upcoming rebound rally is going to be a small rally. Usually this type of rebound pattern can see much lower prices after the 'bounce'.</li>
</ul>



SK Hynix (000660 KS) has lost 41% of its value since its peak 1 month ago, a pretty dramatic correction.
No need to state the obvious, 5 weeks down, the stock is ultra-oversold, it should rebound soon but the real question is:how far can the rebound rally go?

According to our model the upcoming rebound rally is going to be a small rally. Usually this type of rebound pattern can see much lower prices after the 'bounce'.


SK Hynix Tactical Outlook: Imminent Small Rally, And Then?

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>KRX-Listed 2x Long ETFs on SK hynix saw AUM retreat from June highs, but investor interest remains substantial with net flows negative on only four out of 20 trading days.</li>
<li>Regulators are stepping in: Korea will triple minimum deposit requirements for single-stock leveraged ETFs from 31 July, responding to the surge in AUM, heightened volatility and persistent inflows documented here.</li>
<li>The inverse ETF is up 64.2% month-to-date as SK hynix declined, yet experiences outflows. Across the segment, ETF flows and daily rebalancing remain relevant for underlying liquidity.</li>
</ul>


KRX-Listed 2x Long ETFs on SK hynix saw AUM retreat from June highs, but investor interest remains substantial with net flows negative on only four out of 20 trading days.
Regulators are stepping in: Korea will triple minimum deposit requirements for single-stock leveraged ETFs from 31 July, responding to the surge in AUM, heightened volatility and persistent inflows documented here.
The inverse ETF is up 64.2% month-to-date as SK hynix declined, yet experiences outflows. Across the segment, ETF flows and daily rebalancing remain relevant for underlying liquidity.


SK Hynix (000660 KS): Persistent Leveraged ETF Inflows Precede Tighter Rules

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

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

Event-Driven

<ul>
<li>KSD CEO confirms 2.5%t hard cap on ADR conversion despite 25% SEC headroom. Two way conversion starts July 29, but scaling the cap is fully Hynix call.</li>
<li>Hynix not pushing 2.5% cap hike, instead engaging FSC on ADR registration including third-party conversions. Market confused as past exemptions existed, raising questions on intent and signaling possible hidden agenda.</li>
<li>Market suspects Hynix may limit ADR pool expansion to capture premium, using FSC registration talks as cover. Base case is gradual pool opening with controlled conversion flow.</li>
</ul>


KSD CEO confirms 2.5%t hard cap on ADR conversion despite 25% SEC headroom. Two way conversion starts July 29, but scaling the cap is fully Hynix call.
Hynix not pushing 2.5% cap hike, instead engaging FSC on ADR registration including third-party conversions. Market confused as past exemptions existed, raising questions on intent and signaling possible hidden agenda.
Market suspects Hynix may limit ADR pool expansion to capture premium, using FSC registration talks as cover. Base case is gradual pool opening with controlled conversion flow.


KSD Confirms Hynix ADR 2.5% Hard Cap, Only Hynix Can Expand It. Outlook on the Actual Playbook

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>South Korea overtakes China &amp; HK as EM's second-largest country allocation at 22.4%, driven almost entirely by a surge in Technology weights in recent months.</li>
<li>Samsung and SK Hynix anchor the move, with Hynix's ownership climbing to 76.8% of funds — closing the gap to Samsung to single digits for the first time.</li>
<li>Rotation is broadening beneath the mega-caps: SK Square, Samsung Electro-Mechanics and Celltrion all see fresh inflows, funded partly by trims in Coway and Samsung Epis.</li>
</ul>


South Korea overtakes China &amp; HK as EM's second-largest country allocation at 22.4%, driven almost entirely by a surge in Technology weights in recent months.
Samsung and SK Hynix anchor the move, with Hynix's ownership climbing to 76.8% of funds — closing the gap to Samsung to single digits for the first time.
Rotation is broadening beneath the mega-caps: SK Square, Samsung Electro-Mechanics and Celltrion all see fresh inflows, funded partly by trims in Coway and Samsung Epis.


South Korea Overtakes China as EM's 2nd Largest Allocation

<ul>
<li>Seoul Economic Daily flagged senior sourced messaging. Points to Hynix running TSMC style setup, capping usable pool near 2.5 percent and scaling ADR only via secondary issuance.</li>
<li>Worst case for arb. Strong incentive to capture ADR premium as funding. Hard to directly link to recent drawdown, though buyback plus secondary timing could support it.</li>
<li>Market still anchors 2Q reset on utilization shifts under US regulatory pressure, so coordinated ADR setup is a stretch. Base case is downside from arb shutdown, watching for TSMC-style execution.</li>
</ul>


Seoul Economic Daily flagged senior sourced messaging. Points to Hynix running TSMC style setup, capping usable pool near 2.5 percent and scaling ADR only via secondary issuance.
Worst case for arb. Strong incentive to capture ADR premium as funding. Hard to directly link to recent drawdown, though buyback plus secondary timing could support it.
Market still anchors 2Q reset on utilization shifts under US regulatory pressure, so coordinated ADR setup is a stretch. Base case is downside from arb shutdown, watching for TSMC-style execution.


On Headlines that Hynix Will Fully Block ADR Conversion

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

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SK Hynix (000660 KS)

SK Hynix Tactical Outlook: Imminent Small Rally, And Then?

SK Hynix has lost 41% of its value in a month, now ultra-oversold - a small rebound rally is imminent, but the question is: how far can it go?

Nico Rosti