"Korea's Stock Market Dubbed 'World's Wildest'... U.S. Shocked as KOSPI Triples Then Plunges 40%"

"Unprecedented Volatility Unseen in Major Stock Markets"
"Individuals May Be Left with Losses Once the Party Ends"

The Korean stock market has received the dubious label of a "rollercoaster of fear." This is the assessment of The Wall Street Journal (WSJ), a leading U.S. financial publication, referring to the extreme volatility that has persisted in the domestic market for recent months.

On August 24 (local time), the WSJ published an article titled, “The World’s Craziest Stock Market Is Now a Ride of Terror,” commenting that “Korea, home to Squid Game and K-pop, is now a market showing levels of volatility in major-country stock exchanges that have not been seen in years.”

On the 25th, the closing price of the KOSPI was displayed on the electronic board in the dealing room of Hana Bank in Jung-gu, Seoul. The KOSPI showed high volatility, falling more than 4% intraday before successfully turning to an upward trend in the afternoon. Yonhap News Agency

The publication pointed out that the Korea Composite Stock Price Index (KOSPI) more than tripled over the past year, only to plunge by about 40% between June and July. Although the KOSPI has since rebounded nearly 20% from its recent low, high intraday volatility remains persistent. The WSJ also noted that, in response to these market swings, a new term “RollerKOSPI” has emerged among Korean individual investors.

The WSJ also introduced cases of overseas institutional investors who suffered heavy losses after making hasty investments in the Korean stock market. “Situational Awareness,” an AI theme-specialized hedge fund, held a substantial amount of shares in SK hynix, a Korean company, but suffered a staggering 67% loss in July alone. To repay loans taken from other banks to finance these investments, Situational Awareness was forced to liquidate most of its listed stock holdings.

However, the WSJ pointed out that the majority of these losses have been concentrated among Korean individual investors, particularly retail investors. The WSJ explained, “Retail investors may be weak individually but form a powerful collective when united,” highlighting the example of a 25-year-old investor who started investing with savings and previous investment returns but ultimately lost everything in SK hynix and single-asset leveraged exchange-traded funds (ETFs).

Jung Euijung, head of the Korea Stock Investors Association, strongly criticized the market in an interview with the publication, saying, “The volatility (of the domestic market) is excessive. It’s not a healthy investment arena; it’s a gambling den, a casino.” According to the WSJ, Jung recently suggested a moment of silence for individual investors at a National Assembly forum, urging that “if we are to return to a normal investment environment, the government must step back and a major overhaul is necessary.”

Meanwhile, the WSJ also highlighted issues with KOSPI volatility last month. At that time, Spencer Jakab, a contributor to the WSJ newsletter, warned that KOSPI was “at risk of becoming a Squid Game,” and cautioned, “When the party is over, it’s individuals who may end up shouldering most of the losses.”

This content was produced with the assistance of AI translation services.