Chairman Kim Byunghwan: "Korean Stock Market Decline Excessive... Value-Up Fund to Be Injected This Week"

Financial Services Commission Holds 'Stock Market Situation Review Meeting'
Urges Institutional Investors to Play Active Role

Financial authorities are taking market stabilization measures as the KOSPI index fell to the 2400 level last week, increasing volatility in the financial market. Starting this week, a 200 billion KRW 'Value-Up Fund' will be injected, and institutional investors have been urged to play an active role in reducing volatility in the domestic stock market.

On the morning of the 18th, the Financial Services Commission held a 'Stock Market Situation Review Meeting' at the Government Seoul Office together with related agencies such as the Financial Supervisory Service and Korea Exchange to discuss future response directions.

The KOSPI index fell 5.63% (144.29 points) last week (11th?15th). On the 13th alone, it dropped 2.64%, marking the lowest point of the year, and on the 15th, it broke below the 2400 level intraday, setting a new yearly low.

The stock price of Samsung Electronics, the largest by market capitalization, wavered, increasing volatility in the KOSPI index. On the 14th, Samsung Electronics closed at 49,900 KRW, falling below 50,000 KRW for the first time in 4 years and 5 months. Foreign investors net sold 1.7117 trillion KRW over five trading days.

Kim Byung-hwan, chairman of the Financial Services Commission, stated, "Due to the export-dependent economic structure, there is uncertainty regarding U.S. policies related to key industries such as semiconductors and secondary batteries, but the recent decline is somewhat excessive," emphasizing, "It is necessary to maintain a calm perspective rather than overreact."

Regarding future response measures, financial authorities judged that since foreign investors’ supply and demand volatility is high, an active role by institutional investors is necessary to reduce volatility in the domestic stock market.

Chairman Kim urged the prompt execution of the Value-Up Fund to help improve supply and demand in the domestic stock market. Accordingly, related agencies such as the Korea Exchange will begin deploying the 200 billion KRW Value-Up Fund starting this week. Additionally, plans are underway to establish a second fund worth 300 billion KRW.

Chairman Kim added, "Given the significant domestic and international uncertainties, financial authorities will maintain high vigilance and closely monitor market trends," and urged, "Listed companies should also strengthen communication with the market and investors through Value-Up disclosures, especially in such situations."

He continued, "Financial authorities are prepared to immediately activate market stabilization measures such as exemption from maintaining credit loan collateral ratios and expansion of treasury stock acquisition limits whenever necessary," adding, "Efforts to improve the domestic stock market’s structure through capital market advancement policies will also continue in the medium to long term."

Lee Bok-hyun, governor of the Financial Supervisory Service, emphasized, "We will prepare to promptly block market instability through sufficient and immediate measures if necessary and strictly punish unfair trading that exploits market instability with zero tolerance. Furthermore, we must steadily pursue tasks that domestic and foreign investors are watching with high expectations, such as establishing a short-selling electronic system and improving corporate governance."