Futures, Options Expiry Converge as 'Quadruple Witching Day' Looms

**AI PRISM* Customized Economic Briefing**

*Editor's note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an AI-based customized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.*

Corporate Funding Shift: Bank lending to corporations rose by 9.6 trillion won last month from the previous month, marking the largest increase in 10 months. As corporate bond issuance contracts amid heightened interest rate volatility, companies are clearly shifting their funding channels to bank loans.

Treasury Stock Cancellation Rush: Following implementation of the third Commercial Act amendment, approximately 50 listed companies have announced treasury stock cancellation plans totaling 24 trillion won. Companies are also rushing to incorporate provisions for strategic use of treasury shares—including employee compensation, M&A, and new business investments—into their articles of incorporation at this year's annual general meetings.

ETF Capital Flight: Amid volatile market conditions following the Iran situation, Samsung Asset Management and Mirae Asset Global Investments alone saw 18 trillion won in assets under management evaporate within a week. Conversely, Plus Asset Management and Woori Asset Management recorded net asset increases as institutional investor funds migrated en masse to short-term financial products such as MMFs.

1. Loans Replace Corporate Bonds as Monthly Increase Hits 10-Month High

According to the Bank of Korea's February Financial Market Trends report, bank lending to corporations reached 1,379.2 trillion won last month, up 9.6 trillion won from the previous month. This represents the largest increase since April last year—approximately 4 trillion won more than January's 5.7 trillion won rise. Meanwhile, corporate bond issuances totaled just 29.67 trillion won from the start of this year through reporting date, while redemptions reached 30.60 trillion won, resulting in net redemptions of 928.3 billion won. "In a high-inflation volatility environment, if lower-rated companies struggle to issue corporate bonds, the overall market could contract significantly," warned Chung Yong-taek, chief economist at IBK Investment & Securities.

2. 50 Listed Companies Announce 24 Trillion Won in Cancellations; Rush to Amend Corporate Charters for Treasury Stock Use

Major companies have been announcing treasury stock cancellation plans in rapid succession since the third Commercial Act amendment took effect just nine days after passing the National Assembly. Samsung Electronics will cancel 87 million shares (valued at approximately 16 trillion won at current prices) in the first half of this year. SK has decided to cancel 4.8 trillion won worth, while Hanwha will cancel 560.8 billion won in treasury shares. The amendment requires companies to cancel existing treasury shares within 18 months; retaining or disposing of shares without cancellation requires shareholder approval at general meetings. Celltrion, Hyundai Mobis, and E-Mart are among companies submitting agenda items at their annual general meetings to establish grounds for using treasury shares for employee compensation and M&A purposes.

3. 'Quadruple Witching Day' Alert on March 12; Unsettled KOSPI Braces for Volatility

Concerns are rising about increased volatility in domestic equity markets as 'Quadruple Witching Day'—when stock index futures and options expire simultaneously with individual stock futures and options—approaches. According to Korea Exchange, open interest in domestic futures and options markets totals approximately 21.1 million contracts, with KOSPI 200 futures and options open interest at roughly 240,000 and 1.19 million contracts respectively. "With VKOSPI briefly exceeding 80, moves to reduce risky asset exposure have emerged. Foreign investors may roll over their net short futures positions to the next contract month, potentially sustaining selling pressure in the futures market," analyzed Jeon Kyun, researcher at Samsung Securities. The KOSPI closed at 5,609.95, up 77.36 points (1.40%) from the previous trading day, extending its winning streak to two consecutive sessions.

4. ETF Withdrawals in Volatile Market Vaporize 18 Trillion Won from Samsung, Mirae Asset

Amid extreme volatility following the Iran situation, assets under management at the top 20 domestic asset managers declined by 28.60 trillion won during the week of March 3-9. Samsung Asset Management and Mirae Asset Global Investments saw AUM decrease by 11.70 trillion won and 6.36 trillion won respectively, with equity asset outflows accounting for 81.95% of total declines. Conversely, Plus Asset Management and Woori Asset Management recorded net asset increases of 1.12 trillion won and 944.3 billion won respectively, as institutional funds migrated to short-term instruments such as MMFs. "Institutional risk aversion will likely persist until geopolitical uncertainties clear," said a securities firm official.

5. Long-term Investment in Global Asset Allocation Funds Advocated

As U.S. and Israeli airstrikes on Iran sent global financial markets into a chaotic March, the author advocates long-term investment in global asset allocation funds such as TDFs (Target Date Funds). Citing Professor Jeremy Siegel's research, the piece presents empirical evidence that risk-adjusted returns improve with longer investment horizons, and that over 20-30 year periods, equities deliver higher returns than bonds while actually exhibiting lower volatility. The author emphasizes that improving risk-adjusted returns spatially through global asset allocation and maximizing them temporally through long-term investment represents the most reliable path to investment success for individual investors. TDFs combined with systematic dollar-cost averaging are proposed as practical implementation tools.

6. Won-Dollar Exchange Rate Falls for Second Day to 1,460 Level; Treasury Yields Stabilize

The won-dollar exchange rate fell for a second consecutive day to close the week at 1,466.5 won, influenced by stabilizing international oil prices and dollar weakness. International crude oil prices, which briefly exceeded $100 per barrel, have recently retreated to the $80 range, pushing the Dollar Index (DXY) down to the 98 level. Bond markets also showed stability, with 3-year Treasury yields closing at 3.253% and 10-year yields at 3.608%, both lower than the previous trading day. Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol told the National Assembly: "We will utilize all policy tools including supplementary budgets to minimize the impact of the Middle East situation on livelihoods, the economy, and industry."