KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
South Korea’s Kospi Index has been the world’s best-performing stock market in 2025, soaring a staggering 71% year-to-date — its biggest rally since 1999. But beneath the euphoria, warning signs are starting to flash.
The Kospi 200 Volatility Index (VKOSPI) — a measure of expected stock swings — has spiked to levels last seen during April’s tariff-triggered selloff, signaling that investor anxiety is creeping back into the market. Even more concerning, the VKOSPI’s spread versus the US Cboe Volatility Index (VIX) is now at its widest since 2004 — a clear sign of tension building beneath the surface.
Key Takeaways for Investors
1. Volatility is rising — and that’s not a good sign.
While markets elsewhere remain calm, the sharp jump in South Korea’s volatility index shows traders are bracing for bigger swings. Samsung Securities’ analyst Jun Gyun warns that “expectations for the rally have grown excessive,” suggesting call options are overvalued as investors bet aggressively on further gains.
2. The AI chip frenzy may be overheating.
The Kospi 200 Index — heavily weighted toward chipmakers like Samsung Electronics and SK Hynix — has surged 83%, outpacing the broader market. But as traders pile into tech-driven optimism, some analysts say the rally may be running ahead of fundamentals.
3. Foreign investors are quietly taking profits.
After last week’s 3.7% slump — the worst weekly drop since April — foreign funds sold ₩1.65 trillion (RM4.66 billion) in futures tied to the Kospi 200. Though the market has rebounded slightly, it’s still down nearly 3% from its November peak, hinting that foreign capital may be turning cautious.
4. Hedging activity is picking up.
Both bullish and bearish contracts are rising, but traders are paying a premium for upside protection — a classic late-stage rally behavior. As John Ley of Clifton Derivatives noted, “the Kospi rally shows signs of fatigue.” His advice? Use options to hedge exposure before volatility spikes further.
Bottom Line
South Korea’s market has been a global outperformer, but rising volatility, profit-taking by foreigners, and overbought sentiment are clear red flags. The rally’s next chapter may not be as smooth — and smart investors should start thinking about protection, not just participation.
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