The KOSDAQ market is quickly regaining momentum following the implementation of regulations on single-stock leverage exchange-traded funds (ETFs). Short-term funds, which had previously concentrated on leverage products based on large-cap stocks like Samsung Electronics and SK Hynix, are now diversifying, leading to increased trading volume and institutional buying in the KOSDAQ.
According to the Korea Exchange, the KOSDAQ index rose 23.89% from 644.78 on July 30 to 798.81 on August 7. The index has seen a continuous upward trend for five consecutive trading days from July 31 to August 6, the first day of the regulation. Notably, on July 31 and August 3 and 4, the KOSDAQ market triggered buy-side circuit breakers, indicating strong buying pressure.
Trading volume has also increased. The average daily trading volume in the KOSDAQ during the five trading days before the regulation (July 24-30) was 5.08 trillion won, but it rose by 13.4% to 5.76 trillion won during the six trading days following the regulation (July 31-August 7). In contrast, the trading volume of single-stock leverage ETFs, which reached 13.9 trillion won on July 30, plummeted to the 1 trillion won range after the regulation.
Previously, individual investors concentrated their short-term funds in single-stock leverage products to take advantage of high volatility. However, with the increase in the minimum deposit requirement and other regulations, access to these products has decreased, leading to a rapid decline in trading. Analysts suggest that this shift in investment demand from leverage products to domestic stocks and KOSDAQ-related ETFs has contributed to the revitalization of the KOSDAQ market.
Trading in KOSDAQ-related ETFs has surged as well. From July 31 to August 7, ETFs such as 'KODEX KOSDAQ 150 Leverage,' 'KODEX KOSDAQ 150 Futures Inverse,' and 'KODEX KOSDAQ 150' ranked among the top in trading volume. The rapid rise of the KOSDAQ index has attracted investment demand for leverage products betting on the index's increase.
On the supply and demand side, institutional investors have shown notable buying activity. From July 31 to August 7, institutions net purchased 956.1 billion won in the KOSDAQ market. Individuals also contributed with a net purchase of 120.5 billion won during the same period, while foreign investors sold a net 1.1152 trillion won.
As funds that previously sought short-term profits through large-cap leverage products shift to individual small and mid-cap stocks, the upward trend in KOSDAQ stocks has become more pronounced. From July 31 to August 7, many small and mid-cap stocks outperformed large-cap stocks in terms of growth rate. During this period, Bonu saw a staggering increase of 380.62%, ranking first in growth rate, while RF Materials (102.38%), OISolution (99.62%), BQ AI (93.48%), and Bit & Electronics (79.08%) also recorded significant gains.
According to Kwon Beom-seok, a researcher at Samsung Securities, "The resolution of supply and demand concentration in the KOSPI market is key to the KOSDAQ rebound. The alleviation of supply and demand concentration in large-cap stocks, particularly around single-stock leverage products, has created a favorable environment for KOSDAQ supply and demand as surrounding funds increase."
* This article has been translated by AI.
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