South Korea's Financial Supervisory Service Governor Lee Chan-jin expressed regret over approving 16 high-leverage single-stock ETFs tracking Samsung Electronics and SK Hynix, sparking a selloff in memory chip shares that spread from Seoul and Hong Kong into US pre-market trading. Samsung Electronics fell 12.31% to 310,000 KRW and SK Hynix dropped 12.47% to 2,555,000 KRW, helping push the KOSPI down roughly 9-10% from its recent high and triggering a market-wide circuit-breaker halt. The ETFs, launched in late May, held combined assets of roughly 14 trillion won, with about 92% of holders being retail investors. In Hong Kong, the CSOP SK Hynix Daily 2x Leveraged Product plunged 23.37% and the CSOP Samsung Electronics Daily 2x Leveraged Product fell 23.68%, while Korean domestic leveraged ETFs lost more than 25%. Goldman Sachs estimated that a 5% swing in the Korean equity market could trigger roughly $4.7 billion in rebalancing flows by options dealers, amplifying the selloff.
SK Hynix IncRegulator's regret over leveraged ETFs triggered a selloff in SK Hynix shares, which fell 12.47%.
Micron Technology Inc
Sandisk Corp
Seagate Technology PLC
Western Digital Corporation
Samsung Electronics Co LtdRegulator's regret over leveraged ETFs triggered a selloff in Samsung Electronics shares, which fell 12.31%.