The recent drop of Seoul shares is excessive in light of Korea’s economic fundamentals, said Choi Jong-koo, chairman of the Financial Services Commission, on Oct. 30.
Choi told reporters that the government is closely watching the trends of the stock market. “When and how the government executes its prepared contingency plans depends on the market situation,” he said.
He met reporters after the “Financial Day" ceremony held at the 63 Convention Center on Yeouido.
The Financial Services Commission announced on Oct. 29 tht it would raise 500 billion won worth of stabilization funds to stabilize the capital market. Despite the announcement, the Seoul bourse tumbled below the psychologically important 2,000 point mark on that day.
Choi also presided over an emergency staff meeting on Oct. 30 and ordered them to come up with comprehensive measures that could be implemented by the government’s economy-related ministries to stabilize market sentiment.
Choi stressed that the current situation is widely different from the financial crisis in 2008. “Ten years ago, Korea’s foreign exchange market and short-term financial market were all unstable, not to mention the stock market. But now, financial markets other than the stock market are operating normally.”
Regarding the greater volatility of the domestic stock market compared with emerging economies in Southeast Asia, he explained, "The Seoul bourse has attracted much more foreign investment. Korean retail and institutional investors reacted excessively to the recent outflow of foreign capital.”
Choi said it is difficult to say when additional measures will be implemented, adding that a decision will be made based on a thorough review of market situations.
"We are preparing for long-term recovery rather than expecting that the market will be stabilized soon by a few measures in a short period of time," he added.