Seoul-listed shares tumble more than 10% despite record Nasdaq debut, as leveraged ETFs raise fresh volatility concerns An advertisement for SK hynix is displayed on the side of a building during the company's Nasdaq debut in New York on Friday. (Reuters) A wave of single-stock leveraged exchange-traded funds tied to SK hynix's newly listed US shares is set to hit the market this week, underscoring growing investor demand for products linked to the South Korean chipmaker.US ETF issuers are lining up to launch products tied to the chipmaker, following the strong Nasdaq debut of SK hynix's American depositary receipts, which jumped 13.08 percent from their offering price to close at $168.49 on Friday.The flurry of ETF launches underscores growing global investor interest in the Korean chipmaker.This week's lineup includes the 2x Long SK hynix Daily ETF, which seeks to deliver twice the daily return of SK hynix ADRs, and the 1x Short SK hynix Daily ETF, which aims to provide the inverse of the ADRs' daily performance. Both products are offered by ETF issuer Leverage Shares.Also in the pipeline are the ProShares Ultra SK hynix ETF, which seeks to deliver twice the daily return of SK hynix ADRs; the GraniteShares 2x Long SK hynix Daily ETF and the GraniteShares 2x Short SK hynix Daily ETF; and a 2x Leveraged SK hynix ETF from Corgi Funds.Direxion, a leading provider of leveraged ETFs, has also filed to launch a 2x Leveraged SK hynix ETF, though it has yet to announce a listing date. The firm is well known among Korean investors for its Direxion Daily Semiconductor Bull 3X Shares ETF, also known as SOXL, one of the most widely held US-listed equity ETFs among local investors.The rapid rollout of leveraged ETFs, however, has also raised concerns about increased market volatility. Unlike Korea's stock market, which imposes daily price limits, US markets have no such trading curbs, leaving leveraged products more exposed to sharp price swings.Leveraged ETFs typically rebalance their exposure near the market close each trading day. Investment banks acting as swap counterparties often hedge their positions by buying or selling the underlying ADRs, a practice that can amplify intraday volatility in the underlying security.Some analysts say heightened volatility in SK hynix ADRs could eventually spill over to the company's Seoul-listed shares.The domestic SK hynix shares came under heavy selling pressure on Monday despite the ADRs' strong Nasdaq debut, falling more than 13 percent in intraday trading.The decline pushed the stock below the 2 million won ($1,327) mark for the first time in intraday trading since June 11, helping drive the benchmark Kospi below the 8,000 point-mark, down more than 8 percent from the previous session. During the session, a sell-side sidecar, which halts program trading for five minutes, and a 20-minute circuit breaker were both triggered to curb excessive volatility. The rout also hammered Korea-listed leveraged ETFs tracking SK hynix, with the products tumbling more than 20 percent during the session.Local brokerages remain divided over whether the strong performance of SK hynix's ADRs can lift the valuation of its underlying Seoul-listed shares."The US listing could lead to a re-rating of both its US-listed ADRs and Seoul-listed shares," Kim Dong-won, head of research at KB Securities, said.Not everyone shares that view, however. Roh Dong-gil, an analyst at Shinhan Securities, cautioned that a valuation premium for the ADRs does not necessarily translate into a higher valuation for the underlying shares in Korea."An ADR premium and an upward re-rating of the target valuation for the Seoul-listed shares are not necessarily the same," Roh said. "How much of the US market's price discovery will be reflected in the Seoul-listed shares is the key question."