Bank of Korea warns: single-leveraged ETFs of SK Hynix and Samsung Electronics may amplify stock market risks.

robot
Abstract generation in progress

Odaily Planet Daily News: The Bank of Korea disclosed in a written document submitted to the National Assembly that, amid the rapid expansion of single-stock leveraged ETFs backed by Samsung Electronics and SK Hynix, structural “grouping/pack trading” and volatility risks in the Korean stock market may be being amplified. The combined market capitalization and trading volume shares of the two companies in the Korean stock market have risen significantly: the market cap share increased from about 36.1% at the end of last year to more than 55% recently, while the trading value share jumped from 27.9% to 63.5%.

South Korea’s financial regulators also voiced similar concerns, stressing the need to continuously monitor the potential impact of related products on market stability and systemic risk. Single-stock leveraged ETFs may intensify one-way capital flows when market sentiment changes. If the market trend reverses, and when combined with intraday rebalancing and derivative hedging mechanisms, it could further amplify price volatility. (Etoday)

View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
Add a comment
Add a comment
No comments
  • Pinned