As the Kospi index hits an all-time high and continues to show strength day after day, individual investors have poured money into exchange-traded funds (ETFs) that bet on a market decline. Although the domestic stock market is strong, it is interpreted as an outlook that a correction from profit-taking could emerge soon.
In particular, some are raising concerns about a global stock bubble and a U.S. recession. Investors who expect stocks to fall turned their attention to inverse ETFs, with funds flowing into leveraged inverse products that can offer higher expected returns than plain inverse products.
According to Koscom Check on the 11th, individuals the previous day were net buyers the most of Samsung Asset Management's "KODEX 200 Futures Inverse 2X" ETF, which tracks twice the Kospi index's daily decline, at 108.4 billion won.
No. 2 was "KODEX Inverse," bought at 25.5 billion won. The previous day, the Kospi index ended transaction at 3,314.53, a record high. On the day our stock market set a new record, individual investors bet more than 130 billion won on inverse products.
Since September began, the Kospi index has closed higher for seven straight trading days except for the 1st. During this period, it jumped 5.5%, and as of 10:30 a.m. that day, it was showing a firm, slightly positive tone around the 3,330 level.
Individuals were net buyers of 407.5 billion won of the KODEX 200 Futures Inverse 2X ETF between the 2nd and the 10th, when the uptrend continued. In particular, over the past two trading days, they invested more than 100 billion won per day in large amounts. They also bought 84.4 billion won of the KODEX Inverse ETF.
They appear to be aiming for short-term gains through inverse products on the view that a pullback will follow the Kospi's rapid rise in a short period. Typically, leveraged and inverse ETFs, which track twice the underlying asset's daily rise or fall, are used as short-term investment products.
In particular, the recent market has shown gains partly by reflecting expectations that President Lee Jae-myung would keep the major shareholder capital gains tax threshold at the current 5 billion won during his 100th-day press conference. As the president actually stated his stance on the issue during the 90-minute press conference that began at 10 a.m. that day, the expectations materialized, but the possibility of a correction due to the subsequent disappearance of the catalyst is also being raised.
The president said of strengthening the major shareholder capital gains tax standard, "If stock market revitalization would be hampered by it, there's no need to insist," adding, "I do not necessarily think the 5 billion won threshold must be lowered to 1 billion won." He added that he would leave detailed discussions to the National Assembly.
In the securities industry, the domestic stock market may see some correction, but it is expected to draw an upward curve in the mid to long term. Investors are focusing more on the possibility of a rate cut in September than on U.S. recession fears. If the U.S. maintains an accommodative monetary policy, liquidity could flow into global asset markets, likely acting as a boon for the domestic stock market as well.
The U.S. Producer Price Index (PPI) for August, released overnight, fell 0.1% from the previous month, the opposite of the market's expectation for a 0.3% rise. As assessments emerged that price pressures eased faster than expected, some in the market say three rate cuts could occur within the year. The U.S. Consumer Price Index (CPI) for August will be released tonight.
Kim Jae-seung, a researcher at Hyundai Motor Securities, said, "There are various events before entering a U.S. base rate cut cycle, but a buy-the-dip strategy is valid for stocks in Korea and the United States."