On July 29, local time, J.P. Morgan Chase released the latest research report stating that the large-scale deleveraging process experienced by the South Korean stock market since mid-June this year is nearing its end. According to the report, the liquidation operation of leveraged ETFs has basically been completed, and the deleveraging process for hedge funds has been completed by about 90%, and the overall leverage level is falling back to a more reasonable range. J.P. Morgan strategist Mixo Das and others said in the report that with the market correction, the capital size of leveraged ETFs has dropped from its previous peak to 17 billion US dollars, and the rapid influx of large amounts of capital had clearly slowed down before. Taken together, the current position situation in the Korean stock market is already quite attractive, and it has advantages such as low valuation and good profit growth momentum. The report also suggests that the recent sharp drop in stock prices may still cause further deleveraging pressure in the next few days. Furthermore, given the risk of interest rate hikes at the Federal Reserve Open Market Committee meeting and the market's high expectations for upcoming earnings reports from hyperscale technology companies, many investors remain cautious. In terms of sector allocation, J.P. Morgan is optimistic about sectors such as department stores, cosmetics, travel, brokerage, and construction that will benefit from the “wealth effect.” The bank is particularly optimistic about the Bank of Korea sector, believing that it is being supported by three favorable factors: first, the increase in residents' income improves asset quality; second, the Bank of Korea's interest rate hike cycle helps increase net interest spreads; and third, active market transactions will also drive revenue growth from related businesses.
Zhitongcaijing · 3d ago
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On July 29, local time, J.P. Morgan Chase released the latest research report stating that the large-scale deleveraging process experienced by the South Korean stock market since mid-June this year is nearing its end. According to the report, the liquidation operation of leveraged ETFs has basically been completed, and the deleveraging process for hedge funds has been completed by about 90%, and the overall leverage level is falling back to a more reasonable range. J.P. Morgan strategist Mixo Das and others said in the report that with the market correction, the capital size of leveraged ETFs has dropped from its previous peak to 17 billion US dollars, and the rapid influx of large amounts of capital had clearly slowed down before. Taken together, the current position situation in the Korean stock market is already quite attractive, and it has advantages such as low valuation and good profit growth momentum. The report also suggests that the recent sharp drop in stock prices may still cause further deleveraging pressure in the next few days. Furthermore, given the risk of interest rate hikes at the Federal Reserve Open Market Committee meeting and the market's high expectations for upcoming earnings reports from hyperscale technology companies, many investors remain cautious. In terms of sector allocation, J.P. Morgan is optimistic about sectors such as department stores, cosmetics, travel, brokerage, and construction that will benefit from the “wealth effect.” The bank is particularly optimistic about the Bank of Korea sector, believing that it is being supported by three favorable factors: first, the increase in residents' income improves asset quality; second, the Bank of Korea's interest rate hike cycle helps increase net interest spreads; and third, active market transactions will also drive revenue growth from related businesses.
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