CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK) plummeted 8.57% during intraday trading on Friday, reflecting significant selling pressure on the exchange-traded fund.
The sharp decline is attributed to ongoing regulatory uncertainty in South Korea surrounding single-stock leveraged ETF products. The Korea Financial Supervisory Service has warned that the side effects of these products are intensifying and is studying dedicated stabilization measures, creating a persistent policy overhang that continues to suppress leveraged ETF valuations.
Leveraged ETFs tracking Samsung Electronics and SK Hynix have grown to approximately 14 trillion KRW in assets, with roughly 92% held by retail investors. The regulatory concerns have already triggered significant market volatility, including a previous single-day KOSPI plunge exceeding 7% with two circuit breaker activations. Additionally, the Korea Exchange postponed the launch of weekly options on Samsung Electronics and SK Hynix, originally scheduled for late June, citing recent market volatility, which further contributed to investor caution.
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