Comparative news, according to Reuters, the Korea Composite Stock Price Index (KOSPI) fell 30% from its June 19 high. The previous stock market frenzy driven by the AI boom and leveraged capital quickly turned pessimistic. The South Korean government originally planned to eliminate South Korea's discounts by introducing

more investment tools and improving corporate governance, but sharp market fluctuations have made the effects of policies and investors' risk tolerance come under scrutiny.

South Korea's regulators allowed the listing of single-stock leveraged ETFs on May 27. Investors only need to complete 1 hour of training and deposit at least 10 million won to participate. In the same period, the market capitalization of Samsung Electronics and SK Hynix both reached $1 trillion, driving KOSPI to more than double the level in October last year and surpass 8,000 points. Retail investors borrowed heavily to chase the AI market, and KOSPI's financing balance increased by about 75% during the year, reaching a record 29.8 trillion won on June

24.

As Samsung Electronics and SK Hynix together account for more than 53% of KOSPI's total market value, related leveraged products further amplify market fluctuations. At the beginning of July, the Korean Panic Index VKOSPI rose to 97.99, the highest level since statistics began in 2009. Citibank estimated on July 28 that retail investors lost $38.7

billion in leveraged ETFs.

The market correction has also brought social pressure. A Seoul psychiatrist said that the number of stock investment-related patients he has received has risen from 7 to 8 patients per day last year to an average of 11 per day since June of this year. Busan police also arrested a man in his 20s who allegedly stabbed a YouTuber, who is accused of blaming the other party for stock losses. Currently, the South Korean authorities have tightened restrictions on individual investment in leveraged

ETFs. Analysts believe that excessive volatility may also affect South Korea's goal of being included in the MSCI developed markets index.

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