Korean equity turbulence may have peaked after a historic sell‑off cleared
leveraged positions and regulatory curbs cut trading in high‑risk products. A
Korean equity volatility index fell to a two‑month low last week after hitting a
record high in June. Forced liquidations reduced outstanding margin debt, and
tighter rules on leveraged ETFs squeezed volumes and assets linked to Samsung
Electronics and SK Hynix. Morgan Stanley says deleveraging is more than half
complete. The KOSPI is down nearly 40% from its June peak, and global funds have
sold over $100 bln of Korean equities year‑to‑date, leaving EM fund exposure to
Korea weakened.
