🚨 Korea Exchange, Stock Market Stability
Today Korean Economic News | 2025.01.03
📌 Kwon Seong-dong: "Political turmoil makes the stock market difficult... The ruling party and government will do their best for an upward market."
💬 Kwon Seong-dong, floor leader of the People Power Party, stated at the Korea Exchange opening ceremony that the current political turmoil is negatively affecting the stock market. He assured that the government and the ruling party would do their utmost to stabilize and recover the market. He also expressed regret over criticisms that politics is not fulfilling its role.
1️⃣ Easy to Understand
Just like how the prices of goods at a store can fluctuate greatly each day, this refers to a situation where stock prices change significantly. In such an environment, investors may hesitate to buy stocks, thinking there is a high possibility of incurring losses.
This is similar to the common situation of considering currency exchange when preparing for a trip abroad during times of frequent exchange rate fluctuations. The greater the price fluctuations, the higher the uncertainty, which can create anxiety among investors.
Ultimately, the stability of the stock market is a crucial factor not only for individual investors but also for the trust and vitality of the entire economy. This is why the government and related institutions actively intervene to ensure market stability.
2️⃣ Economic Terms
📕 Korea Exchange (KRX)
A market institution in South Korea that operates the trading of securities and derivatives.
- It supports the trading of various financial products, not just stocks, and plays a role in maintaining the fairness and efficiency of the market.
📕 Stock Market Stability
Refers to a state where there is low volatility in the stock market and stock prices remain relatively stable.
- It provides confidence to investors and is essential for creating a long-term investment environment.
3️⃣ Principles and Economic Outlook
💡 The Relationship Between Politics and Economy
- Political stability is a crucial foundation for economic growth. As emphasized by Representative Kwon, political turmoil undermines investor confidence and increases stock market volatility. An uncertain political environment also impacts corporate management strategies, which can ultimately have a negative effect on stock prices. Therefore, if the political sphere fails to support the economy, the stock market will inevitably suffer the consequences.
💡 The Role of the Government and the Ruling Party
- Representative Kwon pledged that the government and the ruling party will do their utmost to stabilize and recover the stock market. This conveys the message that the political sphere should not merely engage in political debates but also pay attention to the stock market, a significant driver of the economy. Many experts emphasize that policy support and political stability are essential for enhancing corporate competitiveness and achieving sustainable economic growth.
4️⃣ In conclusion
Political turmoil is likely to increase stock market volatility and dampen investor sentiment. If this situation persists, investors may move their funds to safer assets, leading to decreased market liquidity.
However, if the government and political circles actively implement market stabilization policies and resolve political uncertainties, the stock market is likely to shift in a positive direction.
In particular, if the fundamentals of the Korean economy remain strong in the long term, stock market stability and recovery can be reasonably expected.