South Korean Presidential Office to Investigate Structural Factors Behind Stock Market Volatility

Kim Yong-bum, head of the policy office at the South Korean presidential office, announced that an investigation will be conducted into the recent significant fluctuations in the South Korean stock market. He has requested the Financial Services Commission and the Financial Supervisory Service to assess the structural factors involved. The scope of the investigation will not be limited to leveraged ETFs but will cover the entire market structure. Kim pointed out that there are inherent structural issues within the South Korean stock market, where global market fluctuations are often amplified. While leveraged ETFs may exacerbate market volatility, they are not the sole cause; factors such as the proportion of derivatives trading and the structure of investors need to be closely examined. Additionally, Kim mentioned that the market's enthusiasm for Chinese DRAM manufacturer Changxin Storage, which has been listed in Shanghai, and the efforts of Chinese state-owned enterprises to advance deep ultraviolet lithography equipment research and development may raise concerns about the competitiveness of Samsung Electronics and SK Hynix in the memory chip sector, reflecting a situation similar to previous instances.

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