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SK Hynix ADR premium in the U.S. likely to persist after ruling

Korean regulators restricted the number of new SK Hynix ADRs that can be created by converting local shares, helping keep the ADR premium elevated, according to MarketWatch.

Reported · Written up by our desk · ETFs

MarketWatch reports that the U.S. pricing premium for SK Hynix American depository receipts is expected to remain after a Korean regulatory ruling.

The outlet says the premium reflects the gap between trading in SK Hynix ADRs and the company’s domestically listed ordinary shares.

It attributes the likely persistence of the premium to restrictions on how many ADRs can be created by converting local shares.

Those limits reduce the ability for arbitrage through fresh ADR issuance, MarketWatch says, which supports the continued spread between ADRs and the local share price.

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