The iShares MSCI South Korea ETF (EWY) plummeted 5.02% during intraday trading on Wednesday, marking a significant decline for the fund that tracks South Korean equities.
This sharp drop occurred despite broader gains in the South Korean market, as reported in financial news. The decline is attributed to regulatory developments, with Korean brokers agreeing to tighten investor protections for single-stock leveraged exchange-traded funds tracking key components like Samsung Electronics and SK Hynix. Proposed measures include a fivefold increase in minimum margin requirements, aimed at curbing retail leverage, which could lead to reduced trading activity and selling pressure in these major stocks that heavily influence the ETF's composition.
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