Now Reading: South Korea small caps surge 30% as chip ETFs face curbs
-
01
South Korea small caps surge 30% as chip ETFs face curbs
South Korea's small-cap Kosdaq index has jumped as much as 30% from its July low, driven by a rotation out of leveraged exchange-traded funds tied to heavyweight chipmakers Samsung Electronics and SK…
The Story in Brief
South Korea's small-cap Kosdaq index has jumped as much as 30% from its July low, driven by a rotation out of leveraged exchange-traded funds tied to heavyweight chipmakers Samsung Electronics and SK Hynix. Regulators recently imposed stricter deposit requirements on such leveraged products, curbing retail access and pushing money toward smaller names, Livemint reports. The Korea Exchange halted program buying for the gauge three times this month as Kosdaq futures surged.
The Kosdaq rose 11% last week while the benchmark Kospi slipped 5.1%, the small-cap gauge's best relative performance since the dot-com era in 2000. The shift follows a historic selloff spurred by global artificial intelligence jitters that sent the Kospi plunging nearly 40% from its June peak, triggering forced liquidations. Analysts expect volatility-loving retail investors who left Kosdaq for single-stock leveraged ETFs to return.
The Indian Opinion
The usual narrative has been that AI mania only benefits big tech, but South Korea's sudden small-cap revival shows how quickly regulatory tweaks can redirect speculative money. The froth in single-stock leveraged ETFs was always a warning sign, not an engine of genuine growth. Now the question is whether Kosdaq can hold its gains once the chip giants stabilise, or if this is just a rotation that reverses as soon as margin players are allowed back in.
Source: livemint.com
This story was synthesised by AI from the source linked above.
