"What Lee Wanted as a 'Hot Stock Market' Backfired"...Foreign Media Point to Policy Failure After KOSPI Plunge

[Financial News] Foreign media reports have pointed to policy failures by the South Korean government amid sharp swings in the KOSPI and losses suffered by individual investors.

On the 4th local time, the British financial daily Financial Times (FT) published an article titled "South Korea's president wanted a hot stock market. He got something harder to handle," linking the recent KOSPI plunge to President Lee Jae Myung's push to boost the stock market.
Since taking office, Lee has stressed that household assets concentrated in real estate should be redirected into productive sectors such as the stock market. In a booklet marking the first anniversary of the administration, titled "38 Major Achievements of the People's Sovereignty Government," the government also highlighted the KOSPI nearing the 8,000 level as one of its flagship economic accomplishments.
However, FT said trust in the policy began to weaken as the KOSPI fell to around the 6,000 range and losses among individual investors widened.

The government has since moved to respond. On the 16th of last month, the Financial Services Commission (FSC) temporarily suspended new listings of single-stock leveraged products tied to Samsung Electronics and SK hynix, which had been allowed at the end of May. It also extended mandatory investor education from two hours to three and raised the minimum deposit required for new and additional purchases from 10 million won to 30 million won.
The overheated market appears to have cooled somewhat after the regulations. Daily trading volume for the SK hynix leveraged product fell from 130 billion won on the 31st of last month to 56 billion won on the 3rd of this month.
Still, FT said the growing losses among people in their 20s and 30s, who invested on the government's policy signal, are fueling discontent that is spilling over into political backlash against Lee.
[email protected] Sung Min-seo Reporter