They kept buying even when prices were cut in half... Net outflows for leveraged products

Money is flowing out of single-stock leveraged products. For the first time since their listing, these products posted net outflows last week, signaling a shift in the behavior of investors who had been making aggressive bets.
According to the Korea Exchange on the 26th, 14 single-stock leveraged products based on Samsung Electronics and SK hynix were estimated to have recorded net outflows of about 49.6 billion won during the week of June 20 to 24. The figure was calculated by converting changes in listed shares into the net asset value (NAV) on each day. It was the first time since their listing on May 27 that weekly funds in single-stock leveraged products turned to net outflows. On a daily basis, 111.5 billion won left on June 20, followed by 242.6 billion won on June 21. Although 260.5 billion won and 147.5 billion won flowed back in on June 22 and 23, respectively, another 103.5 billion won exited on June 24, leaving the week in net outflow.
The latest outflow is drawing attention because it marks the first break in a steady stream of inflows that had continued even as share prices were cut in half. The prices of seven SK hynix leveraged products fell by about 56% to 60% from May 29, the last trading day of their debut week, through June 24. Seven Samsung Electronics leveraged products also dropped roughly 48% to 50% over the same period. Even so, about 12.1409 trillion won flowed into the 14 products from June 1 to July 16. As losses deepened, investors kept adding money in so-called averaging down. That trend appears to have cooled last week. Market watchers are now asking whether investors have reached the limit of their additional buying power. If so, so-called capitulation selling, in which investors finally lock in losses and exit the market, could become a reality.
[email protected] Choi Du-seon Reporter