People Power Party lawmaker Ahn Cheol-soo on July 6 called for the delisting of leveraged exchange-traded funds tracking Samsung Electronics and SK Hynix stocks, stating that 212 trillion won invested in these products is amplifying market volatility. Ahn attributed the volatility surge to daily rebalancing and arbitrage activities in a market structure where the two companies represent 60% of KOSPI's market capitalization. The KOSPI volatility index reached 90.8, while the exchange rate exceeded 1,550 won and foreign capital inflow from Hong Kong investments remained minimal at 500 billion won out of 11 trillion won total.
Ahn Cheol-soo Calls 212 Trillion Won ETFs Primary Volatility Driver
Ahn wrote on Facebook that KOSPI has become a casino due to 212 trillion won in funds concentrated in Samsung-Hynix leveraged ETFs amplifying stock price volatility. He described KOSPI's current structure as a "top-heavy fraction" where Samsung Electronics and SK Hynix account for 60% of market capitalization. Ahn stated that applying leverage to this structure causes daily rebalancing and arbitrage attempts to shake the market, driving the KOSPI volatility index to a record 90.8.
Policy Achieved Minimal Foreign Capital Inflow and Exchange Rate Defense
Ahn stated that the original policy goals of domestic repatriation of overseas investment funds and exchange rate defense effects are minimal. He specified that out of 11 trillion won in Samsung-Hynix leveraged investment funds in Hong Kong stocks, only 500 billion won flowed into Korea. Ahn noted that the exchange rate now exceeds 1,550 won. He pointed out that investor assets are evaporating due to the "negative compounding effect" characteristic of leveraged products.
Ahn Demands Dismissal of Financial Services Commission Chairman and FSS Governor
Ahn declared that Samsung-Hynix leverage products are a complete policy failure, eroding corporate value and national wealth by trillions of won daily. He stated that strong corrective measures including delisting are necessary to normalize the stock market. Ahn proposed that single-stock leverage should be prohibited and that Active ETF regulations tied to a 0.7 correlation coefficient should be relaxed as a more rational approach.
Ahn called for President Lee Jae-myung to hold the Financial Services Commission Chairman and Financial Supervisory Service Governor accountable through dismissal. He criticized that while investors anxiously watch their stock accounts melt day by day, the two heads failed in outlook, response, and policy formulation. Ahn questioned why President Lee is merely observing irresponsible officials who only preserve their positions and watch for cues. He warned that if the current "roller-KOSPI" trend continues, Korea's stock market will be treated as an unpredictable junk stock in the global market.
FAQ
What amount did Ahn Cheol-soo state is invested in Samsung-Hynix leveraged ETFs?
Ahn Cheol-soo stated on July 6 that 212 trillion won is invested in leveraged ETFs tracking Samsung Electronics and SK Hynix stocks. He identified this concentration as the primary driver amplifying KOSPI volatility through daily rebalancing and arbitrage activities.
How much foreign capital from Hong Kong investments flowed into Korea according to Ahn?
Ahn specified that out of 11 trillion won in Samsung-Hynix leveraged investment funds in Hong Kong stocks, only 500 billion won flowed into Korea. He cited this minimal inflow as evidence that the policy's original goal of domestic repatriation of overseas investment funds was not achieved.
