SKHY listing - 10 Jul 26

Posting special because seeing $7709 HK today really caught my attention.
First of all, $7709 HK is the SK Hynix 2x ETF listed in HK. For a long time, this was the only way for people outside Korea to get exposure to $SKHY.
Because of that, this ETF’s AUM swelled as market participants rushed in.
I had an initial hypothesis that $7709 HK was sold off quite heavily today because the participants who had to rely on it now have a better option in $SKHY.
Since creation and redemption for $7709 are not announced in real time, one way to estimate how much $0660 got pushed down is the discount on NAV for $7709HK versus $0660.
Because $7709 and 0660 open and close at different times, we need to measure the performance gap using the same time standard.
I chose to use the 2:30 PM HKT close as the benchmark because that’s when rebalancing for $7709 happens.
At 2:30 PM HKT, yesterday $7709 was 91.94 and today it is 89.68—down 2.45%.
Meanwhile, 0660 is 2,186,000 KRW and marked at 2,180,000 KRW today at 2:30 PM HKT.
KRWHKD was 0.005201 yesterday at 2:30 PM HKT and it is now 0.005217.
Therefore, (see the image below)
From the large discount in $7709’s price, I expect a very large sell flow to have been flowing into it.
Implications.
In the first order, I expect this to be bullish for $SKHY versus the ADR itself.
In the second order, I expect 0660 to also trade more strongly on Monday itself, ceteris s.
Of course, ahead of the New York open, there can be many other external events that show up. However, ceteris s—I see a number of mechanical flows flowing into $SKHY
. This will also push up the premium for $SKHY versus $0660 in KR.
I expect this premium to be anywhere from around 10% to higher and to persist.#