Pushing for diversified rebalancing of single-stock leverage to reduce late-session volatility

In response to concerns that trading just before the close in singlestock leveraged products for Samsung Electronics and SK hynix is increasing market volatility, related asset managers have decided to pursue a plan to divide the rebalancing timing into several sessions during the trading day. On the 30th, the Korea Financial Investment Association said that this direction was agreed upon at an emergency meeting attended by executives in charge of liquidity provision at eight asset managers and securities firms, including Samsung, Mirae Asset, KB, Korea Investment, Shinhan, Hanwha, Kiwoom, and Hana Asset Management. Singlestock leveraged products are designed to track the daily rise and fall of the underlying asset at a set multiple. Because of this, concerns have been raised that if buy and sell orders become concentrated at a specific time, especially just before the market close, during the process of matching the target multiple each day, they could further increase stock price volatility. The Korea Financial Investment Association explained that it will reduce the impact on the underlying asset by dispersing trades concentrated around the close into intraday trading and after the market close.