JPMorgan: South Korea Leveraged ETF Deleveraging Wave Nearing End

BlockBeats News, July 29th - JPMorgan Chase said in a morning research report today that the intense deleveraging process in the South Korean market since mid-June indicates that the unwinding of leveraged ETFs has been mostly completed, with hedge funds having completed about 90% of their operations and related ratios have returned to more acceptable levels.

JPMorgan Chase strategists including Mixo Das wrote in the report that overall, the current positioning of the South Korean stock market is attractive, with low valuations and strong earnings growth momentum. "As the market has pulled back, the scale of such funds has now dropped to $17 billion," the report said, noting that the previous rapid influx of funds into leveraged ETFs has significantly slowed in recent days. However, the recent sharp drop in stock prices may still trigger further deleveraging in the coming days. At the same time, considering the risk of a rate hike at the Federal Open Market Committee meeting and the high expectations for the upcoming earnings reports of mega-cap tech companies, many investors remain cautious.