ETFs Linked to STAR 50 Index Show Decline; Korean Leverage Risks Persist While Analysts flag External Constraints for Market Recovery

Stock News08-03

PP科创50 (03151) dropped 5.25% to HKD 11.01, while 南方科创板50 (03109) fell 5.24% to HKD 15.2, and 博时科创50 (02832) declined 4.54% to HKD 11.36.

According to market media reports, South Korean financial regulators are pushing to introduce an "emergency action authority" that would allow them to quickly lower the leverage multiples of single-stock leveraged products during emergencies. Previously, these products were considered a major factor behind the sharp market volatility. Goldman Sachs data shows that as of July 31, the asset management scale of Korean leveraged ETFs has fallen from a peak of $53 billion to $24 billion, with leverage exposure dropping to 1.9% of the market's free float. Goldman Sachs noted that the potential daily rebalancing flows of leveraged ETFs have roughly halved from their peak, but their impact remains significant.

A look in the rearview mirror suggests that the recent pullback occurred against a backdrop of uncertain macro liquidity and growing concerns over the sustainability of AI capital expenditure ahead of interim report releases, which concentrated and amplified the divergence in holdings. However, the main external constraint on this round of market recovery comes from Federal Reserve policy. Market expectations that the Fed may not cut rates this year could pose a gray rhino risk. If the Fed begins to raise rates, it typically signals the start of a tightening cycle. Reviewing the Fed's past rate hikes, US stocks generally show a pattern of rising before the first hike and falling after; A-shares tend to be affected within 1-3 months after a rate hike.

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