South Korea's stock market suffers historic blow: 700,000 retail investors wiped out by leverage, authorities urgently assess "five major market rescue measures"

Glonghui July 30th ｜The Korean stock market suffered a historic plunge in July, causing around 700,000 retail investors to face heavy losses in leveraged ETFs and sharply increasing government pressure to rescue the market. Reportedly, Korean authorities are currently evaluating five potential intervention measures:1) National Market Stabilization Fund: The government has set aside approximately KRW 10 trillion (around USD 6.9 billion) for stock market stability during periods of market turmoil. The last time this tool was actually used dates back to the 2008 financial crisis.2) Short Selling Ban: The Korean Exchange is internally assessing the technical feasibility and lead time required to suspend short selling, while also reviewing the operability of narrowing the current 30% limit-up/limit-down range.3) Restricting Leveraged ETFs: Some investors and lawmakers are calling for the mandatory delisting of these products, and an investor group even placed funeral wreaths in front of the National Assembly as a form of protest.4) Margin Requirements: A large number of retail investors borrowed heavily to buy stocks and faced forced liquidation after prices fell, further intensifying market volatility. The government may consider tightening margin requirements. Some experts suggest that brokers could moderately relax collateral requirements or offer a brief grace period to alleviate mechanical selling pressure.5) Share Buybacks: The government may also adjust buyback regulations to encourage companies that have already announced repurchase plans and believe their stock prices are undervalued to accelerate their buyback pace.