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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] The Korea Exchange (KRX) confirmed on December 16 that it plans to introduce rule amendments by the end of this year following growing investor backlash over the designation of SK Hynix as an “investment warning” stock.
The Market Surveillance Department of KRX’s Preemptive Measures Division stated that the amendments to the Enforcement Rules of Market Surveillance Regulations will aim to revise the criteria for designating investment warning stocks. Instead of relying solely on absolute returns, the new guidelines will adopt a benchmark of excess returns relative to the market index and exclude large-cap stocks from the designation.
Earlier, KRX designated Doosan Enerbility on December 8, and on December 10, added Hyundai Rotem, SK Hynix, and SK Square to the list. Stocks labeled as investment warnings face temporary restrictions on margin trading and trading through alternative trading systems such as NXT.
The investment warning system was introduced in April 2023 after a CFD (contract for difference) price drop incident involving eight stocks, to alert investors about long-term rapidly rising stocks. However, with the recent KOSPI rally, large-cap stocks like SK Hynix, which are far from price manipulation concerns, have been designated, prompting significant investor criticism.
Over the past year, SK Hynix’s share price surged approximately 230% amid the AI boom and a memory chip supercycle, while SK Square rose about 290% due to the SK Hynix momentum and amendments to the Commercial Act. On the day of the announcement, SK Hynix closed at KRW 530,000, down KRW 24,000 (4.33%) from the previous day.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
