The Bank of Korea warns: Samsung Electronics and SK Hynix's single-leveraged ETFs may amplify stock market risks

On July 5, according to a written document submitted by the Bank of Korea to the country's parliament, the rapid expansion of single stock leveraged ETFs targeted by Samsung Electronics and SK Hynix may be amplifying the structural "agglomeration" and volatility risks of the South Korean stock market. The combined market value of the two companies has increased significantly in the market value and transaction value of the South Korean stock market. Among them, the market value ratio has increased from approximately 36.1% at the end of last year to more than 55% in the near future, and the turnover ratio has jumped from 27.9% to 63.5%. South Korean financial regulators also expressed similar concerns, emphasizing the need to continuously monitor the potential impact of relevant products on market stability and systemic risks. A single-backed leveraged ETF may intensify the one-way flow of funds under changes in market sentiment. Once the market reverses, it will be superimposed within days. Rebalancing and derivatives hedging mechanisms may further amplify price fluctuations.