South Korea’s presidential office has called for an investigation into the structural reasons why the country’s stock market shows sharper volatility than other markets, according to KBS. Kim Yong-beom, head of the presidential policy office, said the review was ordered in response to recent swings in Korean equities and will cover more than leveraged exchange-traded funds.
Kim said the Financial Services Commission and the Financial Supervisory Service were asked to examine the broader market structure. He said leveraged ETFs may have intensified volatility, but they are not the only factor. The review is expected to focus on areas including the share of derivatives trading and the makeup of the investor base.
He also pointed to developments in China’s semiconductor sector as a source of market concern. Kim mentioned the strong market reception for Shanghai-listed DRAM maker ChangXin Memory Technologies and ongoing efforts by Chinese state-owned companies to develop deep ultraviolet, or DUV, lithography equipment. Those factors, he said, may be fueling worries about the memory chip competitiveness of Samsung Electronics and SK Hynix, in a situation he compared with the earlier “DeepSeek shock.”
South Korea’s presidential office has ordered a review into the structural factors behind the country’s stock market volatility after recent sharp swings in Korean equities, according to KBS.
Kim Yong-beom, head of the presidential policy office, said the Financial Services Commission and the Financial Supervisory Service were asked to investigate why volatility in the Korean stock market has been markedly higher than in other markets.
Review to cover the broader market structure
Kim said the assessment will not be limited to leveraged exchange-traded funds. It will also examine the overall market structure.
According to Kim, the Korean stock market has structural issues of its own, and global market moves of the same scale tend to be amplified in Korea. He said leveraged ETFs may worsen market swings, but they are not the sole reason, adding that the share of derivatives trading and the composition of investors should be examined closely.
China chip developments cited as a concern
Kim also referred to strong investor interest in Shanghai-listed Chinese DRAM maker ChangXin Memory Technologies, as well as efforts by Chinese state-owned enterprises to advance deep ultraviolet, or DUV, lithography equipment. He said those developments may be prompting concern in the market about the memory chip competitiveness of Samsung Electronics and SK Hynix.
He added that the situation resembles the earlier “DeepSeek shock.”
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