Friday's Plunge Is Not the End... Volatile Market Continues "2x Leveraged ETF Measures Are Too Insufficient" | Director Lee Young-hoon

Summary

Director Lee Young-hoon explains why Korean market volatility is structural, driven by the rise of 2x leveraged ETFs and a broken supply-demand balance. He criticizes the planned margin hike as ineffective and advocates restricting leveraged ETFs to professional investors. Turning to semiconductors, he reveals he has recently turned buyer of Samsung Electronics and SK hynix, arguing that AI investment is far from over and the fears around big-tech cash flows are premature.

• Lee sees no near-term end to high volatility because pension funds cannot act as stabilizers while retail money is stuck in leveraged products.
• He believes the 2x leveraged ETF boom has hollowed out KOSDAQ and other sectors, creating a market that only the semiconductor-heavy KOSPI can temporarily hold.
• He strongly criticizes raising the basic deposit for leveraged ETFs to 30 million won, calling it a non-solution and warning it could even be a negative catalyst.
• Lee advocates banning day-trading in leveraged ETFs and restricting access to qualified investors to reduce volatility.
• On semiconductors, he had earlier advised waiting for a cheaper entry in summer; with the pullback he turned positive and told clients to buy this Monday.
• He argues that AI capex is a life-or-death race for both the US and China, making it too early to call the end of the cycle, even though he expects an eventual bubble.
• Big-tech free-cash-flow concerns are real but he thinks competitive dynamics force continued spending, which supports demand for Samsung and SK hynix.
• He notes that the National Pension Service is overweight semiconductors and cannot rebalance, which temporarily protects the sector but keeps the rest of the market fragile.