ChainThink news: On August 4, according to an article by Bloomberg columnist Shuli Ren, the primary risk facing South Korea's stock market is not deteriorating corporate fundamentals, but rather pressure on market structure, regulatory policies, and investor confidence.
Reports indicate that South Korea's stock market was once among the world's hottest but most volatile markets this year, with the KOSPI plunging nearly 40% over 27 trading days.
Despite Samsung Electronics and SK Hynix continuing to benefit from AI chip demand, and the Korean stock market's forward P/E ratio falling to approximately 5.5 times over the next 12 months, investors may still choose to avoid the Korean market.
Ren pointed out that regulators' previous approval of single-stock leveraged ETFs has been one of the key factors amplifying market volatility.
According to Goldman Sachs data, during the peak of the KOSPI in June this year, a 5% price fluctuation in SK Hynix could result in rebalancing flows from related leveraged ETFs accounting for up to 40% of the stock’s average daily trading volume.
Additionally, the SK Hynix leveraged ETF plunged 84% from its June high, triggering liquidations for approximately 360,000 accounts, 62% of which were held by individuals under the age of 35.
Ren believes that the current issue with the Korean stock market is not a lack of AI growth opportunities, but rather concerns over market rules, regulatory credibility, and trading stability.