Korean Retail Investors Accuse Government of Turning Stock Market into Casino, Some Vow to Stop Buying Stocks

The KOSPI index in South Korea plummeted in July, causing significant losses for many retail investors, with a cumulative drop of 22%, marking the largest monthly decline since the global financial crisis. Despite a record rebound of 18% on August 2, retail investors still recorded a net sell-off of KOSPI stocks on that day. The total market capitalization of the South Korean stock market is approximately $3.9 trillion. Influenced by stock market reforms promoted by President Lee Jae-myung and the listing of single-stock leveraged ETFs, retail investors bought about 78 trillion won ($54.2 billion) worth of KOSPI stocks between May and June. After the sharp market decline in July, many investors on social media pointed fingers at the government, with some declaring their decision to stop investing in the South Korean stock market. In July, the KOSPI triggered circuit breakers four times, setting a record for a single month. Samsung Electronics and SK Hynix together account for over 50% of the KOSPI's weight, with their stock prices falling by 21% and 35%, respectively. Analysts point out that deleveraging is unlikely to be completed in the short term, and technology and semiconductor stocks may continue to experience significant volatility in the coming months. The South Korean government suspended the listing of new single-stock leveraged ETFs in mid-July and promised to introduce more measures to stabilize the stock market, but retail investors' anger and criticism towards the government have reached a peak, believing that the measures have come too late.