KOSPI Plunges 9.99% with Samsung Down 12.31% and SK Hynix Off 12.47%
EWY•June 23 saw KOSPI tumble 9.99% as Samsung fell 12.31% and SK Hynix plunged 12.47%, driven by leveraged ETFs that amassed over $9B in two weeks. MSCI kept South Korea in Emerging Markets and SK Hynix’s U.S. listing could curb inflows and heighten volatility for iShares MSCI South Korea ETF.
1. June 23 Market Crash
On June 23, South Korea’s benchmark KOSPI index plunged 9.99%, marking its largest one-day drop since 2008. Samsung Electronics shares sank 12.31% and SK Hynix fell 12.47%, triggering broad market sell-offs and forcing index-linked products to unwind positions into a steep downtrend.
2. Surge in Single-Stock Leveraged ETFs
Since May 27, sixteen new single-stock 2x and inverse ETFs tied to Samsung and SK Hynix have drawn more than $9 billion in assets domestically, while Hong Kong’s CSOP 2x SK Hynix ETF swelled to $16.8 billion. Hyper-active retail trading drove turnover rates near 125% per day, generating an estimated $3 billion–$6.4 billion in brokerage commissions in two weeks.
3. MSCI Retains Emerging Markets Status
MSCI’s latest annual index review kept South Korea in its Emerging Markets category, delaying any upgrade to Developed Market status. That decision is expected to limit additional passive inflows from global developed-market funds into local equities and the iShares MSCI South Korea ETF.
4. SK Hynix U.S. Listing Implications
SK Hynix’s planned U.S. American Depositary Share listing will provide direct access to U.S. investors, potentially boosting liquidity and shifting trading volumes away from South Korea’s domestic market. That reallocation could alter demand dynamics for South Korea-focused ETFs.
