South Korean equity ETFs declined, with the CSOP SK hynix Daily Leveraged 2X Product (07709) falling 8.91% to HK$17.48 as of press time, while the CSOP Samsung Electronics Daily Leveraged 2X Product (07747) dropped 5.91% to HK$45.54.
On the news front, although the Philadelphia Semiconductor Index rebounded overnight on Wall Street, ending an eight-day losing streak, the positive external sentiment failed to transmit to Asia-Pacific markets. South Korea's KOSPI index opened lower today and extended its decline to over 4%, with SK hynix dropping nearly 5% and Samsung Electronics falling nearly 4%.
According to reports, South Korean President Lee Jae-myung stated on the 19th that the government is continuously evaluating what policy measures are needed to normalize the stock market. A comprehensive report will be heard in the near term, and necessary measures will be taken. Lee stated: "A correction after a sharp stock price rise is inevitable, and as for how far the correction will go, nobody knows."
It is worth noting that South Korea's financial regulatory authorities claimed on Monday that Solidigm, a controlling subsidiary of SK hynix, may have violated "dual listing" restrictions with its U.S. listing. This potential risk could lead to a valuation restructuring for SK hynix.
In addition, a series of negative news in macroeconomics, credit, and the memory industry recently has placed heavy pressure on global chip stocks and the South Korean stock market. Goldman Sachs believes the root cause of this selloff is a "buying vacuum" created by Samsung and SK hynix exiting buybacks, rather than a fundamental collapse.