On July 17, Direxion Daily South Korea Bull 3X Shares (KORU) fell 10.4% in pre-market trading, trading at $16.75/share, with turnover of $7.16 million. The decline follows a confluence of negative catalysts hitting the Korean equity market.
On the news front, the Bank of Korea on July 16 raised its benchmark rate by 25 basis points to 2.75%, the first hike since January 2023, unanimously approved to combat triple inflation pressures from a weakening won, June CPI at 3.2%, and 75 consecutive weeks of rising home prices. Deutsche Bank projects three additional hikes to 3.50% by end of Q2 next year. Adding to the selling pressure, Korea's Financial Services Commission announced tightened regulations on single-stock leveraged ETFs, raising minimum margin requirements from 10 million won to 30 million won, limiting trades to 20 shares per transaction, and banning new product listings. Foreign investors and domestic institutions concentrated selling in tech stocks, with institutional ETF disposals reaching approximately $738 million on Thursday alone, accounting for 46% of total net KOSPI selling.
The fund invests at least 80% of its net assets in financial instruments providing daily 3x leveraged exposure to an index measuring large- and mid-cap South Korean equities, covering approximately 85% of free float-adjusted market capitalization.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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