Leveraged funds in the Korean stock market are experiencing a rapid contraction. According to data from the Korea Financial Investment Association, the credit financing balance of the entire market fell back to 32.67 trillion won from the historical peak of 38.6 trillion won on June 24 to 32.67 trillion won, a decrease of 15.4%. Among them, the KOSDAQ sector contracted more significantly, faster than KOSPI motherboards. Amid the wave of forced liquidations caused by the sharp decline in technology stocks, the cumulative amount of consolidation since June 19 reached 1.1 trillion won. It is worth noting that leveraged ETFs have contracted far faster than financing balances, and have become an efficient “accelerator” for market decline. Take the SAMSUNG KODEX 2 times longer ETF as an example. Its size plummeted 48% from the June high to 3.8 billion yuan, and its mechanical daily rebalancing mechanism formed an uninterrupted self-strengthening circuit. Although the removal of external leverage has had a certain impact on A-share sentiment, domestic market stabilization signals are being intensively released, and the bottom of the A-share policy is already evident. On the one hand, the Securities Regulatory Commission firmly maintains the smooth and healthy operation of the capital market; on the other hand, many central state-owned enterprises and listed companies, such as Beijing State Administration and Beijing Holdings, have concentrated on disclosing arrangements to increase their holdings, repurchases, and increase dividend, demonstrating confidence in development. In terms of capital, broad-based ETFs had a sharp net inflow of over 50 billion yuan last week. Looking back, with the holding of a symposium on market stabilization, supervision is expected to further step up market stabilization efforts. If the subsequent decline in the market exceeds expectations, market stabilization measures are expected to target April of last year, starting with various aspects such as financial support, repurchases by central enterprises, and increasing financial institutions' holdings to stabilize the capital market and enhance investor confidence.

Leveraged funds in the Korean stock market are experiencing a rapid contraction. According to data from the Korea Financial Investment Association, the credit financing balance of the entire market fell back to 32.67 trillion won from the historical peak of 38.6 trillion won on June 24 to 32.67 trillion won, a decrease of 15.4%. Among them, the KOSDAQ sector contracted more significantly, faster than KOSPI motherboards. Amid the wave of forced liquidations caused by the sharp decline in technology stocks, the cumulative amount of consolidation since June 19 reached 1.1 trillion won. It is worth noting that leveraged ETFs have contracted far faster than financing balances, and have become an efficient “accelerator” for market decline. Take the SAMSUNG KODEX 2 times longer ETF as an example. Its size plummeted 48% from the June high to 3.8 billion yuan, and its mechanical daily rebalancing mechanism formed an uninterrupted self-strengthening circuit. Although the removal of external leverage has had a certain impact on A-share sentiment, domestic market stabilization signals are being intensively released, and the bottom of the A-share policy is already evident. On the one hand, the Securities Regulatory Commission firmly maintains the smooth and healthy operation of the capital market; on the other hand, many central state-owned enterprises and listed companies, such as Beijing State Administration and Beijing Holdings, have concentrated on disclosing arrangements to increase their holdings, repurchases, and increase dividend, demonstrating confidence in development. In terms of capital, broad-based ETFs had a sharp net inflow of over 50 billion yuan last week. Looking back, with the holding of a symposium on market stabilization, supervision is expected to further step up market stabilization efforts. If the subsequent decline in the market exceeds expectations, market stabilization measures are expected to target April of last year, starting with various aspects such as financial support, repurchases by central enterprises, and increasing financial institutions' holdings to stabilize the capital market and enhance investor confidence.