Investors Suffer Losses as Samsung and SK Hynix Stocks Plummet

Samsung Electronics and SK Hynix saw significant declines, leading investors in single-stock leveraged exchange-traded funds (ETFs) to incur substantial losses.

On June 5, the Korea Exchange reported that Samsung Electronics closed at 329,000 won, down 22,500 won (6.40%) from the previous trading day. SK Hynix also fell by 228,000 won (9.92%), ending at 2,070,000 won.

The drop in these leading stocks caused related leveraged products to plummet as well. The KODEX Samsung Electronics Single-Stock Leverage ETF fell 13.24% to close at 25,565 won. Other products, including TIGER Samsung Electronics Single-Stock Leverage (-13.48%), ACE Samsung Electronics Single-Stock Leverage (-14.08%), RISE Samsung Electronics Single-Stock Leverage (-13.77%), and PLUS Samsung Electronics Single-Stock Leverage (-13.34%), also recorded declines exceeding 10%.

The losses were even steeper for SK Hynix-related leveraged products. The KODEX SK Hynix Single-Stock Leverage ETF plummeted 20.29%, while TIGER SK Hynix Single-Stock Leverage (-20.11%), RISE SK Hynix Single-Stock Leverage (-20.12%), SOL SK Hynix Single-Stock Leverage (-19.77%), and ACE SK Hynix Single-Stock Leverage (-19.68%) all experienced declines around 20%. The KIWOOM SK Hynix Futures Single-Stock Leverage ETF recorded the largest drop among major products, falling 20.90%.

In contrast, inverse products betting against the decline showed strength. The SOL SK Hynix Futures Single-Stock Inverse 2X rose 19.40%, and the PLUS Samsung Electronics Futures Single-Stock Inverse 2X increased by 14.16%.

Investor trading activity was intense, with the trading volume for Samsung Electronics and SK Hynix-related single-stock leveraged and inverse ETFs reaching 8.1018 trillion won. This marked a 43.2% increase from the previous day's 5.6579 trillion won and was the highest level since June 2, when volatility in semiconductor stocks surged to 11.7 trillion won.

Notably, trading volume for the KODEX SK Hynix Single-Stock Leverage ETF surged to 2.5186 trillion won, nearly doubling from the previous day, while the TIGER SK Hynix Single-Stock Leverage ETF saw 1.2682 trillion won in transactions. The KODEX Samsung Electronics Single-Stock Leverage ETF also reached a trading volume of 2.0878 trillion won, indicating a concentration of investor activity. Analysts suggest that both bargain buying and stop-loss orders contributed to the surge in trading.

Market analysts attribute the decline in semiconductor stocks to a combination of shock from Broadcom's guidance and profit-taking.

Han Ji-young, a researcher at Kiwoom Securities, stated, "Broadcom's revenue guidance fell short of market expectations, leading to a downturn in U.S. semiconductor stocks. Foreign selling and rising exchange rates added to the supply burden. The recent rapid increase in stock prices also led to profit-taking after the market had already priced in expectations surrounding NVIDIA CEO Jensen Huang's visit to South Korea."

Lee Kyung-min, a researcher at Daishin Securities, noted, "Broadcom's AI revenue guidance was below expectations, dampening semiconductor investment sentiment, and profit-taking from the recent surge in stock prices was concentrated. Additionally, the demand for cash ahead of major events like the SpaceX IPO contributed to panic selling."

However, analysts do not view this decline as a sign of worsening market conditions.

One researcher commented, "This drop is more of a technical adjustment due to the rapid pace of index increases and heightened concentration rather than a fundamental decline. Since profit momentum is still improving, we should consider this volatility as a process of stabilization."

They added, "It is also possible that patterns of reducing losses will re-emerge after this sharp drop, and from a valuation perspective, the attractiveness of entering the KOSPI centered on semiconductors is increasing again."

* This article has been translated by AI.

Yang Boyeon