KOREA'S SINGLE STOCK LEVERAGE ETF FELL BY 10 TRILLION WON AND REGULATED THE COOLING OF TRADE BEFORE THE NEW REGULATIONS WERE IMPLEMENTED

ON JULY 28, KOREA EXCHANGE DATA SHOWED THAT THE COMBINED VALUE OF ETF TRANSACTIONS, MARKED BY SAMSUNG ELECTRONS AND SK HERCULES, 16 SINGLE-STOCK LEVERAGES AND REVERSES, FELL BY 10 TRILLION WON THIS MONDAY (27 JULY) TO 7.46 TRILLION WON THIS WEEK, DOWN 27 PER CENT FROM THE PREVIOUS TRADING DAY, DOWN BY OVER 30 PER CENT FROM THE PREVIOUS DAY, AND TO 36.9 PER CENT FROM THE TOTAL VALUE OF THE ETF MARKET IN KOREA. OF THESE, SK HERCULES-RELATED PRODUCTS STILL DOMINATE, ACCOUNTING FOR ABOUT 70 PER CENT OF ALL SINGLE STOCK LEVERAGE AND REVERSE ETF TRANSACTIONS. THE MARKET ANALYSIS CONCLUDED THAT THE COOLING OF THE DEAL WAS MAINLY INFLUENCED BY THE NEW REGULATIONS ON FINANCIAL REGULATION IN KOREA, AND THAT SINCE 31 JULY, KOREAN INDIVIDUAL INVESTORS HAD TO HOLD A CASH BASE GUARANTEE OF OVER 30 MILLION WON FOR NEW OR ADDITIONAL SINGLE-STOCK LEVERAGE ETF/ETN, WHILE THE REGULATOR PLANNED TO INCREASE THE SMALLEST TRADING UNIT TO FURTHER DISCOURAGE HIGH-FREQUENCY SHORT-LINE TRANSACTIONS。