Volatility of Seoul stock index drops after curbs on leveraged ETFs
The fear gauge of Korea's stock market has dropped after authorities took steps to curb the 16 single-stock leveraged exchange-traded funds (ETFs) blamed for recent market volatility, the bourse operator said Monday. Financial authorities raised the minimum cash deposit for single-stock leveraged ETF investments on July 31, as the speculative investment products triggered wild swings on the stock…
The Korea Stock Exchange (KRX) reported on Monday that the fear gauge for the Korea's stock market, the VKOSPI volatility index, has declined following new measures to regulate single-stock leveraged ETFs. These ETFs, linked to major companies such as Samsung Electronics and SK hynix, were introduced in May and were identified as contributing factors to recent market volatility.
The KRX announced on July 31 that the minimum cash deposit required to invest in these single-stock leveraged ETFs would be increased from 10 million won to 30 million won. This measure, implemented on July 31, led to a significant drop in the VKOSPI index, which fell to 69.87 on Monday - a decline of 18.91 percent from its previous level of 86.18 on July 30.
This was the first time since May 28 that the VKOSPI index had fallen below 70, marking a 18.91 percent drop.
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Also reported by 1 other outlet
- Volatility of Seoul stock index drops after curbs on leveraged ETFs koreatimes.co.kr
