Exterior view of the Moscow Exchange (MOEX). MOEX
Following the success of leveraged products targeting Korean semiconductors on the Hong Kong stock market, Russia is opening the door to futures investment in the Korean stock market and in Samsung Electronics (005930.KS) and SK hynix (000660.KS). Isolated from the international financial network by high-intensity Western financial sanctions, Russia is introducing “K-semiconductor” financial products to its own stock market so as not to be left out of the global artificial intelligence (AI) rally. There are also expectations that if the Russia-Ukraine war ends and financial sanctions are lifted, futures trading funds could flow into Korea.
According to Interfax, Russia’s largest private news agency, on Thursday, the Moscow Exchange (MOEX) will begin trading futures on the iShares MSCI South Korea ETF (EWY), a leading global product tracking the Korean index, on July 9. A week later, on July 16, it plans to launch single-stock futures trading with Samsung Electronics and SK hynix individual shares as underlying assets.
Russia, whose external investment is blocked by Western financial sanctions, is opening futures trading to keep pace with domestic demand for semiconductor investment. Maria Patrikeeva, director of MOEX’s derivatives market, said at the local conference “Smart-Lab” recently held in St. Petersburg, “Samsung Electronics and SK hynix are Korea’s core technology companies at the center of the global megatrends of semiconductors, memory and AI.” She added, “Russian investors will be able to pursue diversified strategies, such as building portfolios specialized in the overall Korean market using ETFs or concentrating investments in technology-leading stocks.”
Russia’s futures trading is not a product that directly invests in the U.S.-listed EWY ETF or in Korean Samsung Electronics and SK hynix futures. It is ruble-denominated futures trading conducted within Russia, settling only price differences. It is an attempt to fill the vacuum left by sanctions by replicating the price structure of large global ETFs and derivatives. Despite high interest in the Korean market, with spot trading impossible, Russia has chosen a “detour.”
However, there is room for some funds to flow into Korea if Russian financial sanctions are lifted. As global investors’ interest in the Korean market has been rising recently, expectations are high that the path to spot investment could open in the future. The Russian stock market has maintained solid liquidity despite being cut off from Western capital markets. According to MOEX, trading volume in May this year was 161.5 trillion rubles (about 3,324 trillion won), and cumulative trading volume from January to May reached 862.6 trillion rubles (about 17,752 trillion won), up 33.3% from the same period last year.
Global capital’s love call for K-semiconductors is not a phenomenon limited to Russia. Earlier, on the Hong Kong Exchange (HKEX), 2x leveraged ETFs on Samsung and SK hynix were also successful, leading to the domestic listing of single-stock leveraged products. An official at one asset management firm said, “It is evidence of global capital’s great thirst for Korean memory semiconductors, which possess exclusive technological capabilities, even amid geopolitical conflicts.”