The Financial Services Commission (FSC) has strongly refuted a Bloomberg column titled "South Korea Is Becoming Uninvestable, Too," which cited inaccurate statistics.
On August 4, the FSC released a statement asserting, "Given that South Korea is emerging as an indispensable supply chain and investment destination in the global AI market, there is no basis for concerns about being classified as an uninvestable country based on unclear figures."
In the column, Bloomberg opinion columnist Shuli Ren referenced the recent sharp decline in the KOSPI and the government's policy responses, suggesting that even those who still believe in the global AI industry's boom might distance themselves from the KOSPI. Ren raised concerns about South Korea being an unsuitable market for investment.
The column claimed that single-stock leverage products had increased market volatility and that government policy decisions had led to significant losses for individual investors.
In response, the FSC pointed out that some statistics cited in the column appear to be inconsistent with the facts and lack verified sources. A notable example was the claim that "approximately 360,000 accounts experienced forced liquidation." The FSC clarified that the average number of accounts involved in forced liquidation (margin calls) was about 3,000 per day in June, contradicting the cited figure of 360,000.
The FSC emphasized that the fundamentals of the domestic stock market remain robust. According to the FSC, South Korea's GDP growth rate for the second quarter of this year was 3.7% compared to the same period last year, and the current account surplus in May reached a record high of $38.61 billion.
Expectations for the AI and semiconductor industries have also improved the earnings outlook for listed companies. Based on estimates from FnGuide, the projected operating profit for KOSPI-listed companies increased from 644 trillion won at the end of March to 930 trillion won by June 22, and further to 975 trillion won by the end of July, reaching 978 trillion won as of today.
The FSC assessed that the recent volatility in the stock market resulted from multiple factors and noted signs of recovery in investor sentiment.
The commission stated, "The government is committed to maintaining a stable market environment" and is actively working to stabilize single-stock leverage products, which have raised recent concerns, through supplementary measures to manage volatility.
Indeed, trading volume for single-stock leverage products has significantly decreased following the implementation of increased deposit requirements. On August 4, trading volume was 1.3 trillion won, a sharp decline from 12.4 trillion won on July 30, prior to the deposit increase, and from a peak of 19.4 trillion won on June 25.
The FSC concluded, "While managing short-term volatility, we plan to consistently pursue improvements in the capital market's resilience and growth potential."
* This article has been translated by AI.
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