President Lee Jae Myung urges South Korean financial authorities to quickly prepare complementary follow-up measures addressing risks associated with recently introduced single-stock leveraged exchange-traded funds (ETFs) tied to Samsung Electronics and SK hynix. Speaking at a policy briefing at Cheong Wa Dae, Lee says authorities should prepare “prompt” and “well-crafted” measures, citing growing criticism that the ETFs have contributed to increased volatility in the domestic stock market. The ETFs, introduced in May, track the daily performance of the two companies and use leverage intended to magnify short-term price movements. Samsung Electronics and SK hynix together account for roughly half of the Korea Composite Stock Price Index (KOSPI) total market capitalization, and policymakers have pointed to the products as one factor behind swings in the benchmark index. Lee instructs relevant agencies, including the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS), to develop the measures, after earlier comments by senior officials, including the finance minister, raised concerns about potential side effects of the ETFs. The government reviews are framed as risk-management steps in response to market criticism of the products.
President Lee orders swift measures over risks linked to single-stock leveraged ETFs
President Lee Jae Myung urges South Korean financial authorities to quickly prepare complementary follow-up measures addressing risks associated with recently introduced single-stock leveraged exchang...
- President Lee Jae Myung calls for prompt complementary measures to address risks from single-stock leveraged ETFs.
- The ETFs track daily performance of Samsung Electronics and SK hynix and were introduced in May.
- Policymakers link the products to heightened volatility in South Korea’s stock market, including movements in the KOSPI.
- Samsung Electronics and SK hynix together account for about half of KOSPI total market capitalization.
- Lee instructs the Financial Services Commission and Financial Supervisory Service to quickly draft follow-up measures.
President Lee Jae Myung on Wednesday urged financial authorities to swiftly draw up measures to address risks posed by single-stock leveraged exchange-traded funds (ETFs) tied to Samsung Electronics and SK hynix, as the high-risk products come under mounting criticism for exacerbating volatility in the domestic stock market. Speaking at a policy briefing at Cheong Wa Dae, Lee singled out the controversial products, asking Korea Exchange Chairman Jeong Eun-bo, “Isn't there quite a stir over these ETFs?” The president then instructed the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) to “quickly put together well-crafted follow-up measures” to address the issue. Leveraged ETFs are designed to magnify the daily gains or losses of an underlying asset, typically a broad market index such as KOSPI or the S&P 500, by two or three times. Single-stock versions take that concept a step further, allowing investors to make amplified bets on the direction of an individual company rather than a diversified benchmark. While the structure can turbocharge returns
3 hours agoPresident Lee Jae Myung on Wednesday called for prompt complementary measures regarding recently introduced single-stock leveraged exchange-traded funds (ETFs), which have been blamed for heightened volatility in the stock market. "Make sure to prepare complementary measures promptly and effectively," Lee said while receiving policy briefings from economy-related government ministries and agencies at the presidential office of Cheong Wa Dae. His remarks came as single-stock leveraged ETFs, introduced in May and tracking the daily performance of two market heavyweights — Samsung Electronics and SK hynix — have been cited as key drivers of recent volatility in the domestic stock market. As the two companies account for roughly half of the Korea Composite Stock Price Index's (KOSPI) total market capitalization, the products have been cited as one of the factors contributing to heightened volatility in the benchmark index. Top policymakers, including Finance Minister Koo Yun-cheol, have voiced concerns over the side effects of the ETFs and pledged to draw up complementary measures to add
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