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SK Hynix Drops Most in 13 Months as CLSA Says Sell: Seoul Mover

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SK Hynix Drops Most in 13 Months as CLSA Says Sell
The SK Hynix Inc. logo is displayed on a glass door at the company's headquarters in Seoul. Photographer: Jean Chung/Bloomberg

July 2 (Bloomberg) -- SK Hynix Inc. fell the most in 13 months in Seoul after CLSA Asia-Pacific Markets advised selling the stock on expectations memory-chip prices will drop.

Shares in the world’s second-largest maker of computer-memory chips tumbled 8.7 percent at the close, its steepest slide since May 16, 2012. The stock is the biggest decliner in the MSCI Emerging Markets Index. CLSA cut SK Hynix’s rating to sell from outperform, it said in a report today. South Korea’s benchmark index was little changed.

Earnings will peak in the third quarter, CLSA said in the report. Demand for dynamic random access memory chips for personal computers is weaker than what spot prices indicate, it said. The DRAM business accounted for about 70 percent of SK Hynix’s total sales in the first quarter, according to Seong Ae Park, a company spokeswoman.

“Recent experience suggests it will be difficult for SK Hynix’s stock price to increase if the spot price is falling,” Matt Evans, a CLSA analyst based in Seoul, wrote in the report.

To contact the reporter on this story: Sharon Cho in Seoul at ccho28@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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