Park Soo-young of the People Power Party pointed to the "Samjeon-nix" leveraged ETFs, introduced under the Lee Jae-myung administration, as the cause of the worsened stock market volatility. Park said that after Kim Yong-beom, the presidential chief of staff for policy, met with securities firm CEOs, related products were launched at a runaway pace, adding that he would use a parliamentary inquiry to reveal why they were rolled out.
On the 9th, Park posted on Facebook under the title "Starring Kim Yong-beom, directed by Lee Jae-myung," criticizing that "like a scene from a casino movie, the stock market is lurching and damage is piling up."
Park said, "The subject is the Samsung Electronics and SK hynix leveraged ETFs that the Lee Jae-myung administration hastily introduced and that have kept plunging," adding, "On the 8th alone, they fell more than 10%, bringing the average closing price of the 14 products to about 16,000 won, below the listing price (20,000 won). The drop over the past week has reached around 40%."
Park questioned the background of the launch of the Samjeon-nix leveraged ETFs. Park said, "On Jan. 13, Kim Yong-beom, the policy chief, summoned securities firm CEOs for a closed-door meeting," adding, "Kim is said to have discussed single-stock leveraged ETFs along with measures to bring back overseas investors."
He continued, "About three months later, on Apr. 21, a revision to the Enforcement Decree of the Financial Investment Services and Capital Markets Act was approved by the Cabinet, and on May 27, the following month, single-stock leveraged products were launched," adding, "There were also proposals to roll out multiple-stock ETFs to prevent herding, but they were ignored. That's because launching the products before the local elections and propping up share prices was the Lee Jae-myung administration's goal."
Park said, "Right now, only ordinary people who invested trusting the Lee Jae-myung administration are shedding tears of blood," adding, "In tandem with President Lee's announcement of 800 trillion won in semiconductor investment for Honam, shares of Samsung Electronics and Hynix keep falling. Because of the 'negative compounding effect,' losses for leveraged product investors are multiplying. The Samjeon-nix leveraged products are the main culprit that amplified volatility."
Park said, "Everything, including the background to the Lee Jae-myung administration's overreach in launching single-stock ETFs, the decision-making process, and future measures, must be made transparent," adding that he would get to the bottom of it even through a parliamentary inquiry.