Investors Suffer as RISE 200 Futures Plunge to Record Lows

◆Aju Economic Major News
▷"A 2,000 Won Investment is Now Worth 70 Won After a Year"... Suffering Investors in Inverse ETFs
- On June 16, the Korea Exchange reported that the RISE 200 Futures Inverse 2X dropped to 72 Won during trading, marking an all-time low. The KODEX 200 Futures Inverse 2X also hit 70 Won, while the KIWOOM 200 Futures Inverse 2X reached 71 Won, and the TIGER 200 Futures Inverse 2X fell to 75 Won, all setting new lows. - These inverse ETFs were trading at around 2,300 to 2,400 Won at the beginning of last year, but have plummeted due to a prolonged bullish trend in the domestic stock market. Compared to a year ago, when they were valued at 1,600 to 1,700 Won, the decline exceeds 90%. - The situation is similar for standard inverse ETFs. On the same day, the RISE 200 Futures Inverse traded at 1,151 Won, the KIWOOM 200 Futures Inverse at 1,171 Won, and the HANARO 200 Futures Inverse at 2,090 Won, all hitting record lows. - The drop in inverse products is largely attributed to the extended rise in the domestic stock market. In particular, the structure of the inverse ETFs, which track -2 times the daily returns of the underlying index rather than its cumulative returns, has exacerbated losses due to negative compounding effects amid recent volatility.

◆Major Reports
▷Volatility Persists Even After War Ends [YuJin Investment Securities]
- June has seen unprecedented volatility in the domestic stock market. Last week, during a sharp decline in the KOSPI on June 9, the VKOSPI exceeded levels seen during the 2008 global financial crisis and the COVID-19 pandemic. - Generally, volatility and stock prices have an inverse relationship, meaning increased volatility often indicates a change in existing trends. However, this is not always the case. - There have been instances where both stock prices and volatility increased simultaneously. For example, in the year leading up to the peak of the dot-com bubble (March 1999 to February 2000), the NASDAQ rose by 105%, yet 44% of the 262 trading days during that period ended in losses. - The heightened volatility in the domestic stock market can be attributed to excessive concentration in the semiconductor sector and the introduction of single-stock leveraged ETFs on May 27. Additionally, the potential for changes in monetary policy has also contributed to increased volatility. - A ceasefire agreement between the U.S. and Iran is likely to be a positive development for the stock market. A decline in oil prices and normalization in the Strait of Hormuz could ease tightening concerns and alleviate the concentration in the semiconductor sector. - Nevertheless, stock market volatility is expected to remain high. Issues surrounding tolls in the Strait of Hormuz persist, and normalization of oil production facilities will take time. Thus, any shift in monetary policy is more about timing than a definitive end.

◆Major Announcements After Market Close (June 16)
▷OSP to raise 2.464 billion Won through third-party allocation of new shares
▷Gaon Cable announces a stock dividend of 0.8 shares per share
▷Orion Group to retire all 67.5 billion Won of its treasury stock

◆Fund Trends (As of June 15, Excluding ETFs)
▷Domestic Equity Funds: +23.554 billion Won
▷Overseas Equity Funds: +2.134 billion Won

◆Key Schedule for Today (June 17)
▷Japan: Import and Export Statistics (May)
▷UK: Consumer Price Index (May), Producer Price Index (May)
▷Eurozone: Consumer Price Index (May)
▷U.S.: Retail Sales (May)

* This article has been translated by AI.