Overview
- The Kospi fell about 22% for July and then posted a record 17.91% single-day gain on Friday, leaving the market volatile after a dramatic H1 run-up.
- Retail investors drove the earlier surge and relied heavily on margin loans and new single-stock leveraged ETFs to concentrate bets in Samsung and SK Hynix.
- Forced liquidations of margin positions amplified selling pressure and saw retail investors dump very large volumes of shares, producing net retail outflows during the rout.
- Seoul authorities have halted new listings of single-stock leveraged ETFs and pledged additional steps to limit retail leverage while the Bank of Korea and regulators adjust trading and margin rules.
- The episode has provoked fierce public anger and calls to curb overly bullish broker research, and analysts warn confidence and orderly deleveraging could take months even as demand for AI chips remains under debate.