South Korean lawmaker warns KOSPI index has "degenerated into a casino," calls for delisting of leveraged ETFs.

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ME News, July 6 (UTC+8): South Korean lawmakers are increasingly concerned about the risks of single-stock leveraged ETFs, and an opposition party lawmaker has called for such products to be delisted.

On Monday, Ahn Cheol-soo, a conservative People Power Party lawmaker and a former presidential candidate, posted on social media calling for strong remedial measures—including delisting—for South Korean leveraged ETFs tracking Samsung Electronics and SK Hynix. He wrote that the Korea Composite Stock Price Index, KOSPI, has “degenerated into a casino,” and that these products are “a complete policy failure that every day is eroding trillions of won in corporate value and national wealth.” His remarks have further heightened concerns among policymakers and investors about the risks of these ETFs.

These products are designed to deliver twice the return of the underlying stocks. Their automated rebalancing process forces them to buy more when prices rise and sell more when prices fall, which may amplify market volatility.

(Gate.io)
Source: ODAILY

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