SEOUL, July 10 (AJP) - South Korean stocks surged on Friday after SK hynix priced the largest United States listing ever by a foreign company, but the company that supplied the spark closed lower while the rest of the market rallied around it.
The main index in Seoul added 184.03 points to 7,475.94, up 2.5 percent.
The close understates the session. The KOSPI jumped more than 5 percent past the 7,700 line at midday, forcing the Korea Exchange to halt program buy orders for the 34th sidecar of the year, before giving back more than half the gain as investors sold SK hynix into its own celebration.
The chipmaker confirmed a 149-dollar price for its American Depositary Receipts (ADR), roughly 2.9 percent above Thursday's Seoul close, a rare premium to the home-market price in a U.S. flotation. The deal raises $26.5 billion, about 40 trillion won, topping Alibaba's 2014 record for a foreign listing and trailing only SpaceX among U.S. offerings of any nationality.
Conditional trading begins in New York on Friday under the ticker SKHYV, with regular trading from Monday under SKHY.
The premium cut both ways at home. Traders read the New York price as a near-term ceiling for the Seoul shares, since each ADR converts to one-tenth of a common share and any gap invites arbitrage selling.
SK hynix fell 0.3 percent to 2,180,000 won (about $1,450).
Samsung Electronics rose 2.5 percent to 285,000 won (about $190), extending the divergence between the two chipmakers that has defined the market this month.
The rally was broad beneath the top two. Gainers outnumbered decliners 802 to 92 on the main board as institutions bought a net 1.1 trillion won. Individuals sold 772.8 billion won and foreign investors sold 322.6 billion won, returning to the sell side after two sessions of net buying earlier in the week.
The KOSDAQ ran harder than the main board, climbing 43.43 points, or 5.5 percent, to 837.43 and triggering its own buy-side sidecar, the 19th on the junior market this year.
The chip trade carried across the region. The Nikkei 225 rose 1.2 percent to 68,557.73 in Tokyo, where SoftBank Group jumped 10.7 percent while memory maker Kioxia slipped 1.1 percent. The composite index in Shanghai traded modestly lower through the afternoon, out of step with the rally elsewhere.
The won traded at 1,503.60 per dollar, marginally stronger than Thursday.
The real verdict lands Monday, when regular ADR trading opens. Brokerages have lifted their targets on hopes the New York listing re-rates the Seoul shares the way it once did for TSMC, but skeptics counter that a depositary receipt changes where a stock trades, not what it is worth, and Friday's fade suggests the market has not decided which side it believes.
Copyright ⓒ Aju Press All rights reserved.
