South Korean Leverage ETFs Fall Over 20% as Nvidia AI Financing Concerns Mount

According to Zhitong Finance, South Korean leverage ETFs tracking chip stocks fell sharply on Monday, with the Southern 2x Long Hynix ETF (07709) dropping 21.72% to HK$42.68 and the Southern 2x Long Samsung Electronics ETF (07747) declining 18.41% to HK$68.06.

The selloff came as Nvidia's credit default swap (CDS) price posted its largest single-day gain on record. Nvidia is advancing AI infrastructure partnerships worth over $750 billion, including deepened cooperation with South Korea's SK Group and discussions with OpenAI on data center financing. Market concerns intensified over the circular financing structures underpinning these mega-scale AI projects. Meanwhile, South Korea's Financial Services Commission Chair Lee Ik-joon said on July 28 the regulator would impose stricter limits on individual investors' leverage ETF holdings if current measures prove insufficient.