South Korean retail investors are protesting the government's handling of single-stock leveraged funds, which many blame for fueling the Kospi’s meteoric rally and subsequent crash this year that wiped out nearly $2 trillion in investor wealth. The backlash comes after the country’s finance minister apologised for introducing the leveraged products without adequate consideration.
Kospi skyrocketed over 122% since the beginning of the year to hit a lifetime high of 9,386 in June on the back of a global AI frenzy, before things began to go downhill. While South Korea’s stock market grabbed headlines as the world’s best-performing stock market this year so far, analysts were quick to point out the concentration of chipmakers Samsung Electronics and SK Hynix, which make up just over half of the benchmark Kospi.
