South Korea will launch a market stabilization fund worth 40 trillion Korean won
Recently, major events have occurred frequently in South Korea, and the financial market has been impacted. At this critical moment, the South Korean financial authorities have frequently taken action!
According to Global Market News, on December 5th, the Governor of the Bank of Korea, Lee Chang yong, the Chairman of the Financial Commission, Kim Byung hwan, and the President of the Financial Supervisory Agency, Lee Fuk hyun, attended the F4 (Finance 4) meeting. The South Korean financial authorities have previously stated that they will hold daily meetings. The attendees reiterated their stance, stating that they will closely monitor the financial and foreign exchange market conditions and take all necessary measures to stabilize the market promptly if necessary.
The South Korean Ministry of Finance announced on Thursday that the government will launch a market stabilization fund worth 40 trillion Korean won (approximately 28.35 billion US dollars) following the impact of the martial law crisis on the financial market.
The martial law crisis has impacted the financial market
South Korea will launch a market stabilization fund worth 40 trillion Korean won
The South Korean Ministry of Finance stated in a statement that the Bank of Korea may purchase government bonds and expand repurchase operations when necessary. The government is closely monitoring the market and will take measures based on necessary contingency plans.
Previously, the Chairman of the Financial Commission of South Korea, Kim Byung hwan, stated that all available measures will be taken to ensure the normal and stable operation of the financial market; The 10 trillion Korean won stock market stabilization fund will be put into operation at any time, and the bond market and capital market will maximize the use of the 40 trillion Korean won bond market stabilization fund and corporate bond and commercial paper (CP) purchase plan.
However, a series of favorable policies have not led to a significant increase in the South Korean stock market. On December 5th, the South Korean stock market opened slightly red, followed by a brief plunge, with the South Korean KOSDAQ falling more than 1% at the beginning of trading. As of press time, the South Korean Composite Index has regained lost ground, and the main indexes of the South Korean stock market have fluctuated.
In terms of individual stocks, leading stocks such as Samsung Electronics and SK Hynix collectively rose; KB Financial Group continued to plummet, with a drop of over 8% at the beginning of the trading session.
In addition, South Korea released the latest GDP data: the final value of South Korea's GDP in the third quarter increased by 1.5% year-on-year, with an expected increase of 1.5% and an initial increase of 1.50%; A month on month increase of 0.1%, expected increase of 0.1%, and initial value increase of 0.10%.
The political situation in South Korea is chaotic
Market institutions evaluate the impact and influence on financial markets
According to CCTV News, on December 5th local time, the South Korean Presidential Office announced that South Korean President Yoon Suk yeol had accepted the resignation of Defense Minister Kim Yong hyun that morning and nominated South Korean Ambassador to Saudi Arabia, Choi Byung hyuk, as the new Defense Minister.
S&P stated that the negative impact of recent political turmoil in South Korea is unlikely to lead to a change in the country's AA rating in the next year or two.
S&P stated in a statement that South Korea's restoration of relative stability after a brief period of martial law demonstrates the effectiveness of political checks and balances, and the negative impact on market sentiment should meet current credit indicators requirements. Investor confidence may take some time to return to normal; The degree of impact on economic, fiscal, and financial indicators requires time to clarify. This largely depends on the response of the South Korean political system in appeasing investors, thereby reducing the risk premium that investors may adopt when making decisions involving South Korea.
Kaitou Macroeconomist Thomas Matthews stated that amidst the political turmoil in South Korea, market sentiment is currently in a difficult period. Policy makers have been working hard to address the 'Korean discount' - the valuation gap between Korean assets and assets in other regions. This gap to some extent reflects the turbulent political situation, and even before the recent events occurred, this gap seemed to be widening. The valuation difference between the MSCI Korea Index and the MSCI All Country World Index has reached its highest level in nearly 20 years. But if the crisis can be avoided, we have reason to be more optimistic.
United Credit Ratings commented that although the martial law crisis lasted for a short period of time, it still had a short-term impact on South Korea's financial market. Overall, the protection and support policies of the South Korean government and central bank towards the financial market can help alleviate the volatility of the South Korean stock, bond, and foreign exchange markets in the short term. In the long run, if the power struggle between the ruling and opposition parties in South Korea can smoothly transition in the short term, it will help stabilize the country's financial market; But if the political situation falls into long-term turmoil, it will affect the performance of the South Korean economy and financial markets, and the South Korean stock market, exchange rate, etc. will show a relatively long-term weak trend.
US State Department: Yoon Seok yeol seriously misjudges South Korean ruling party's decision and 'opposes impeachment'
CCTV News learned on December 5th that the US State Department's statement that South Korean President Yoon Seok yeol's announcement of "emergency martial law" was a serious misjudgment.
US Deputy Secretary of State Kurt Campbell stated on the 4th local time that Yoon Seok yeol's announcement of "emergency martial law" was a serious misjudgment. Campbell believes that in the coming months, South Korea will face a "challenging situation," and the United States' goal is to clearly express that its alliance with South Korea is "absolutely rock solid.
According to a report by Yonhap News Agency on the early morning of the 5th, the ruling National Power Party of South Korea has held a plenary session of its members of parliament and passed a decision to oppose the impeachment of President Yoon Suk yeol.
Yonhap News Agency also reported that the opposition party in South Korea reported an impeachment motion against President Yoon Suk yeol to the plenary session of the National Assembly in the early morning of the 5th. The Congress will vote on the 6th to 7th.
On the evening of the 3rd, Yoon Seok yeol made an emergency statement at the Longshan Presidential Palace in Seoul, announcing the lifting of martial law six hours later. On the afternoon of the 4th, multiple opposition parties in South Korea launched impeachment motions against the president in the National Assembly.