"On Par with China's 2015 Crisis": Why Foreign Media Issued a Chilling Warning on South Korea

Amid extreme volatility in the domestic stock market, a foreign media outlet has assessed that "South Korea is becoming an uninvestable country."

Bloomberg columnist Shuli Ren published a column titled "South Korea Is Becoming Uninvestable, Too," evaluating that South Korea has home to both the hottest and most volatile stock market in the world this year.

Pointing out that the KOSPI plummeted nearly 40% in just 27 trading sessions from its previous peak in June, she noted that this level of volatility is comparable to the 2015 Chinese stock market crash.

Shuli Ren pointed out that the recent sell-off and the government's clumsy attempts to boost the KOSPI have traumatized a new wave of investors and cast a stigma on the market, highlighting market "volatility" as the biggest issue.

She noted that this year, there have been as many as 33 days when the KOSPI index fluctuated by 5% or more in a single day, compared to just 4 days for Japan's Nikkei 225 index and zero times for Hong Kong's Hang Seng index.

Shuli Ren specifically singled out single-stock leveraged exchange-traded funds (ETFs), approved for introduction by the government in late May, as the primary culprit driving up volatility.

Although the South Korean government has recently tightened regulations—such as raising the basic deposit requirement for leveraged products—she predicted that "side effects will persist unless the products themselves are suspended."

She also mentioned the National Pension Service's inconsistent moves, pointing out that "by arbitrarily raising its domestic stock investment target to avoid selling off its KOSPI holdings, the National Pension Service has abandoned its intrinsic role of cooling down an overheated market."

Lastly, Shuli Ren warned, "In recent years, global asset managers have judged China to be uninvestable due to government policy failures and disregard for investors, and unfortunately, similar concerns are now emerging for South Korea. The South Korean government needs to reflect on whether it knows what it is doing and whether young, first-time investors are being properly protected."

(Produced by Kim Taewon | Video by Lee Yu-jin | Design by Yook Do-hyun | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.