KK HERCULES, U.S. MARKET-LED ETF HEAT

On 10 July, the record-high United States of America, SK Hercules, launched a new round of leverage to link the unit to Wall Street. ProShares, Leverage Shares and Rex Shares, among others, are preparing to launch twice as many SK Hercules ADR products and, in part, reverse products. According to the distributor ' s website, at least six products will be launched next week. KK Hercules leverage ETF is very popular in the Korean market. KK Hercules, Samsung Electronics and Linked Leverages together account for over 70 per cent of Korean stock market transactions, exacerbating the KOSPI index volatility. John Cho, manager of Morgan Chase Asset Management for the Korea Stock Fund, stated: “Parts of the bulk activity appear to be increasingly driven by momentum, and the growth of the single stock ETF magnifies the volume and volatility of large capitalizations. The emergence of leverage ETFs is not a health signal and may presage later in the cycle. According to analysts, the concentration of single-stock leverage products has begun to affect the stocks they seek to trace. The new U.S. market leverage ETP means that the daily rebalancing of financial flows will expand, with the potential to increase already high volatility。