Analysis of Volatility and Major Trends in the ETF Market
The KOSDAQ market has recently experienced significant volatility largely due to the listing of a new active KOSDAQ index ETF. This listing has led to abrupt fluctuations in stock prices, with anticipation surrounding potential ETF-included stocks driving investor sentiment towards aggressive buying. Securities firms mainly utilize a method involving stock loans for establishing positions, thereby avoiding direct market stock purchases. This approach could potentially exacerbate market volatility.
This year, semiconductor materials, components, and equipment (SoBuJang) stocks have demonstrated remarkable growth, surpassing even tech giants like Samsung Electronics and SK Hynix. Some of these key SoBuJang companies have achieved triple-digit growth, prompting calls for reassessment of their valuations. The launch of an active ETF based on the KOSDAQ has generated expectations for improved supply-demand dynamics in SoBuJang stocks, shifting investor focus from KOSPI to KOSDAQ.
The Korea Exchange is considering a strategy to exclude stocks with low liquidity during extended trading hours in the ETF market. This strategy aims to allow trading only when sufficient liquidity is assured through LP involvement. The impending adjustments to pre-market and after-market trading plans may further exacerbate polarization between small-cap and large-cap ETFs. The absence of a finalized direction for the extended hours operation is generating uncertainty in the market.
Related News
Samsung Electronics and SK Hynix Yields Not Enviable, Anticipation of SoBuJang Surge in KOSDAQ Semiconductor ETFSamsung Electronics and SK Hynix Yields Not Enviable, Anticipation of SoBuJang Surge in KOSDAQ Semiconductor ETF
Korea Exchange Considers Reducing 'Commute-Time ETF' Trading Target to Only LP Participating Stocks - Yonhap InfomaxThe Korea Exchange is considering reducing the number of exchange-traded funds (ETFs) available for trading during extended hours, not in the regular stock market hours. Given the characteristics of ETF products, it plans to extend trading hours only for stocks with confirmed liquidity provider (LP) participation to ensure proper pricing. According to the financial investment industry on the 6th, the exchange is considering changing its plan to allow trading of all ETF stocks when creating pre-market and after-market sessions and is instead selecting liquidity-rich stocks to reduce the trading target. The exchange initially included all ETFs as trading targets in its 'Trading Time Promotion Plan' announced in January.
[Stock Market Miscellanea] KOSDAQ Surge Blamed on ETF Setup…The Truth Behind Yeouido's Hot Expectations - Yonhap Infomax○…There's no rollercoaster like this rollercoaster. After plunging by about 14%, the KOSDAQ index surged by more than 15% the next day, and on the 6th, another buying sidecar was activated. Amid this incredible volatility, an intriguing theory circulated in the stock market. It claims that the recent KOSDAQ surge is due to an active ETF scheduled to be listed next week. The plausible scenario suggests that ETF AP/LPs bought stocks to include in the ETF, thereby driving the index up. The theory even details expected stocks to be included by sector. The active ETF's expected stocks include AblBio and others.