Exchange-traded funds tracking the South Korean market continue their downward trajectory. At the time of writing, the TR Korea ETF (02848) has fallen 7.64% to HKD 1,541.5, the CSOP Korea Technology ETF (03431) is down 7.59% to HKD 9.38, and the Samsung Global Semiconductor ETF (03132) has declined 6.35% to HKD 60.5.
The market movement follows regulatory action. On the afternoon of July 16 local time, South Korea's Financial Services Commission (FSC) announced new regulatory measures targeting leveraged single-stock ETFs. Concurrently, FSC Capital Markets Bureau Director Byun Je-ho stated that the high concentration of market capital in Samsung Electronics Co Ltd and SK Hynix Inc, coupled with fluctuating global expectations and concerns over the semiconductor industry's outlook, has amplified volatility in related products.
This regulatory intervention comes after South Korean President Lee Jae-myung commented at a policy meeting in Seoul on Wednesday that the domestic stock market had recently experienced an "unprecedented surge" in a very short period, suggesting it would require time and volatility to stabilize. According to Korean statistics, the total market capitalization of the Korean stock market has shrunk by approximately 19% since the beginning of July, potentially falling below 6,000 trillion won (approximately RMB 27.2 trillion).
Foreign and Institutional Selling Pressure
Notably, reports indicate that foreign and domestic institutional investors have been net sellers of KOSPI-listed stocks, with selling pressure most concentrated in the technology sector. Foreign investors have sold approximately $1 billion worth of tech stocks, while local institutions have offloaded around $1.6 billion. On Thursday alone, local institutions sold ETFs worth about $738 million, accounting for roughly 46% of their total net selling in the KOSPI market for the day.
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