Ulsan mayor says stock market rout wiped out 2% of his total assets

Ulsan Mayor Kim Sang-uk said he personally suffered investment losses from the recent sharp decline in South Korean stock markets.

Kim made the admission Thursday morning during a live broadcast on his YouTube channel "Kim Sang-uk TV," in a segment called "The Mayor Who Reads the News."

"Looking at Friday's newspapers, there are a lot of articles about concerns over the Kospi crash," Kim said during the broadcast. "For ordinary people who have taken big losses from their investments, it must feel very overwhelming."

Kim said he was among those hit. "I had a fund and took a real beating from the crash," he said with a laugh. "It looks like about 2% of my total assets just vanished. The fund fell right along with everything else. It hurts."

Kim used the episode to stress the importance of maintaining a healthy capital market, and also offered a critical view of leveraged exchange-traded funds, which have drawn criticism for amplifying market volatility.

"Do not buy shares with borrowed money — that is not the way," he said. "A healthy capital market and a speculative capital market are two different things. Money is like the blood that keeps an economy alive. The economy can only recover when a healthy capital market takes shape, and the government has an important role to play in that."

Kim also said investor protection depends on curbing forces that distort the stock market. "I think leveraged ETFs played a catalytic role in distorting the market this time around," he said. "They need to be managed more carefully going forward."

Meanwhile, the Kospi staged a sharp rebound Friday morning after three consecutive sessions of steep losses. As of 10:23 a.m., the Kospi was up 16.54 percent from the previous session at 6,518.61, while the Kosdaq had risen 9.83 percent to 708.16.