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FT links the KOSPI plunge to the government's stock market boosting stance
On the 4th (local time) the British economic daily Financial Times (FT), in an article titled 'Korea's president wanted a hot stock market but got more than he could handle', linked the recent KOSPI plunge to President Lee Jae-myung's stance of boosting the stock market.
From immediately after taking office, President Lee has stressed that household assets concentrated in real estate should be redirected to productive areas such as the stock market. In the collection of materials titled 'The 38 Representative Achievements of the People's Sovereignty Government', published to mark the first anniversary of this government's launch, the KOSPI approaching the 8000 line was even presented as one of the government's flagship economic achievements.
But as the KOSPI has been pushed back to around the 6000 line and individual investors' losses have grown, trust in the policy has begun to waver, the FT assessed.
Assessment: "losses among those in their 20s and 30s... are spilling over into political backlash"
The government belatedly moved to respond. On the 16th of last month the Financial Services Commission provisionally suspended new listings of single-stock leverage products on Samsung Electronics and SK Hynix, which had been permitted at the end of May. It increased the prior investor education requirement from 2 hours to 3, and raised the basic deposit needed for new and additional purchases from 10 million won to 30 million won.
Since the regulation, the overheating appears to have calmed for now. Daily trading value of SK Hynix leverage products fell from 1.3 trillion won on the 31st of last month to 560 billion won on the 3rd of this month.
The FT assessed, however, that as losses grow among people in their 20s and 30s who invested trusting government policy, their discontent is spilling over into political backlash aimed at President Lee.
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One comes out every day; I am curious whether the Financial Services Commission will respond this time too
▶ Original source: https://news.nate.com/view/20260805n04405?mid=n0304
