00:00Yes, and as the Cosby tumbles and Asian FX goes on intervention watch,
00:04let's bring in our Bloomberg Markets reporter, Anthony Stephens.
00:07Just talk to us about what we're seeing in Korea and why are the moves so violent today?
00:11Yes, so it kind of started in the US session, right, with the tech sector spalling off a little bit
00:16after Broadcom's kind of soft guidance, right?
00:18It's important to note that it's about guidance, not about profit.
00:21So the kind of parabolic growth you saw in tech slowed a bit and that money's flowed into financials.
00:26So you had the biggest outperformance by financials versus tech in the year.
00:30Now, that dynamic is not very helpful to Asia.
00:33Our banking sector in the region is not as high-weighting as tech.
00:37So you had the region on the back foot from the beginning.
00:41Now, Korea is particularly bad because leveraged ETFs have crowded out both the wall market
00:47and the cash-selling market.
00:49So Koreans have been buying cash stocks versus foreigners for a long time,
00:54but they're being unable to hedge this because leveraged ETFs have taken up all the hedging space in Korea.
01:01Just to run you through the math, if Korean leveraged ETF is down,
01:05is the market down 50%, that leveraged ETF goes to zero.
01:08So their appetite for wall is insatiable.
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