CSOP SK Hynix 2x Leveraged (07709.HK) Down 13.99% as Korean Stocks Trigger Circuit Breaker

NewTimeSpace News: As of 10:40 on November 5, CSOP SK Hynix 2x Leveraged (07709.HK) fell 13.99% to a latest price of HK$18.750. The product has so far traded 123.11 million units today, with turnover of HK$2.29 billion and an average price of HK$18.574; its turnover rate is 11.45%. It has fallen 16.29% week to date. The net asset value per unit is HK$21.8527, and assets under management stand at HK$23.539 billion (about US$3.00 billion). (Note: NAV and AUM are as of November 4; the week-to-date change is based on the October 30 close of HK$22.400.)

South Korean stocks tumbled on November 5, with the KOSPI down 4.75% at 5,413.97. The Korea Exchange activated a sell-side sidecar at 10:16:19 local time, suspending programme sell orders on the KOSPI market for five minutes, after KOSPI 200 futures fell more than 5% from the previous close for over a minute. SK Hynix fell more than 7%, Samsung Electronics nearly 6% and Samsung Electro-Mechanics nearly 12%. Japan's market weakened in tandem, with Tokyo Electron down over 8%, Advantest over 10% and Kioxia over 9%. A day earlier on November 4, US memory names had already sold off sharply: Micron fell 7%, SanDisk 7.91%, Western Digital 6.77%, Seagate 8.13% and SK Hynix's ADR 5.12%, while the Philadelphia Semiconductor Index lost 3.13%. The selloff was attributed to concerns that the memory shortage cycle is peaking and to expectations of tighter data-centre regulation after the US midterm elections.

CSOP SK Hynix 2x Leveraged (07709.HK) is a daily leveraged product under CSOP seeking daily returns equal to twice the daily performance of SK Hynix ordinary shares, mainly through swaps and other derivatives. Leverage resets daily and returns are measured against a single day; when held for more than one day, compounding and the daily reset will cause cumulative returns to diverge from twice SK Hynix's performance over the same period. The product is managed by CSOP Asset Management Limited, with the US dollar as its base currency and AUM denominated in USD.

A Kiwoom Securities analyst believes that, given data-centre investment already under way is unlikely to be significantly disrupted, the impact on existing supply contracts and the downward revision of earnings expectations for AI infrastructure stocks will both be limited.