President Lee Jae Myung Faces Scrutiny as South Korea's Stock Market Volatility Impacts Retail Investors
President Lee Jae Myung is facing increased political pressure as South Korea's benchmark KOSPI index experienced significant volatility following a period of rapid growth. After surging on AI-driven chip demand, the market plunged nearly 40 percent from its June peak, causing substantial losses for millions of retail investors. The administration announced the approval of riskier leveraged investment products, which critics argue created a leverage trap for many citizens. Former justice minister Cho Kuk labeled the government's introduction of single-stock leveraged ETFs as a policy failure, noting that young investors were caught in a trap laid by the government. While the KOSPI's fortunes largely rest on the semiconductor sector, analysts suggest that heavy borrowing and the rush of retail investors making concentrated bets contributed to the market's swings. Despite the losses, some investors like civil servant Eun-bi remain optimistic that the market will stabilize, though she plans to diversify her portfolio to mitigate future risks.