Assembly audit must reveal those responsible for leveraged ETF fiasco
Seoul stocks have been tanking since mid-June, when the bullish market took a sharp turn as investors rushed to dump shares of Samsung Electronics and SK hynix amid growing concerns over the sustainability of Big Tech companies’ unprecedented investments in artificial intelligence (AI). After surging to as high as 9,385.59 points on June 19, the benchmark KOSPI tumbled to as low as 5,262.77…
Since mid-June, Seoul stocks have been experiencing a decline as investors sold off shares of Samsung Electronics and SK hynix due to increasing doubts about the long-term viability of Big Tech firms' heavy investments in AI. The benchmark KOSPI index, which had soared to a peak of 9,385.59 points on June 19, plummeted to a low of 5,262.77 points by July 29.
While market corrections are usually expected following such an extraordinary rally, the volatility in single-stock leveraged exchange-traded funds (ETFs) linked to the two chipmakers has been a major concern. The ETFs, which were introduced on May 27, provide amplified exposure to individual stocks, enabling investors to potentially earn or suffer losses that are twice the daily return of the underlying shares. The products' popularity surged as the AI-driven chip rally gained momentum.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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