South Korean ETFs are leading the decline. As of writing, the South Korea 2x Long SK Hynix ETF (07709) fell 10.54% to HKD 81; the South Korea 2x Long Samsung Electronics ETF (07747) dropped 9.37% to HKD 128.6; and the TR Korea ETF (02848) decreased 4.25% to HKD 1,722.
On the news front, South Korea's KOSPI index extended its decline on Tuesday, dropping 4% to break below the 7,200-point level. This represents a decline of over 10% from the all-time high of 8,046 points reached last Friday. Concurrently, the sell-off in South Korea's bond market has been severe, with the yield on the 3-year government bond surging more than 86 basis points from this year's low, reaching its highest level since November 2023.
Several analysts have warned that, given the KOSPI index's upward momentum and its highly concentrated structural characteristics, it will be difficult for the index to sustain its current upward trajectory over the long term.
Notably, Kyung Kye-hyun, former president of Samsung Electronics' semiconductor division, has publicly cautioned that driven by significant capacity expansion by Chinese companies, global memory chip supply is expected to increase sharply in the second half of next year, which could then lead to price declines. He also warned that if the return on capital expenditure for major technology companies declines, memory demand itself could face a risk of contraction after 2028.
Comments