Jang Dong-hyeok Blames Single-Stock Leveraged ETFs for Market Turmoil, Warns of ‘Black Every Day’

Jang Dong-hyeok, leader of the People Power Party, said on July 9 that single-stock leveraged exchange-traded funds had fueled recent sharp volatility in South Korea’s stock market and raised questions about the government’s responsibility.

At a Supreme Council meeting at the National Assembly, Jang said he was worried the market could be headed for “Black Every Day.” Stock prices have been swinging sharply up and down, stoking fears of forced liquidation, he said. He added that the biggest victims were retail investors who borrowed to invest after trusting the government.

Jang also criticized the process behind the introduction of single-stock leveraged ETFs. He called the products the main culprit in turning the stock market into a casino and said many experts had warned of the risks from the start, but the policy was pushed through ahead of local elections.

He also said the move could not have happened without presidential direction and called for a thorough investigation into the rollout, from the presidential office to the Financial Services Commission and the Financial Supervisory Service.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com