The central bank said products linked to the two heavyweight stocks could deepen market concentration, amplify volatility and reinforce one-way trading flows, prompting closer monitoring of market and financial-stability risks.
Bank of Korea said leveraged ETFs tied to Samsung Electronics and SK Hynix could deepen market concentration, amplify volatility and reinforce one-way trading flows, underscoring concerns that these products may affect both market functioning and financial stability. In a written reply to People Power Party lawmaker Park Sung-hoon, the central bank said the two stocks account for more than half of South Korea’s market capitalization and trading value, a concentration that can magnify the impact of leveraged products linked to them. The bank said it plans to strengthen monitoring of such products’ effects on markets and the financial system.