South Korea pushes back against Bloomberg column calling it 'uninvestable'

South Korea's Financial Services Commission has formally pushed back against a Bloomberg column arguing that the country is becoming "uninvestable," calling the characterization false.

The FSC cited Korea's solid economic fundamentals and competitiveness in the AI and semiconductor industries, and said there is no reason to worry the country could be rated uninvestable. "South Korea is an indispensable part of the global AI supply chain and a premier investment destination," the regulator said.

The FSC issued its official rebuttal Tuesday in response to a column by Bloomberg columnist Shuli Ren titled "South Korea Is Becoming Uninvestable, Too."

Ren described South Korea as home to "the world's hottest but most volatile stock market this year," and said the Kospi's near-40 percent plunge in just 27 trading sessions was comparable to China's market crash in 2015.

The column singled out extreme market volatility as the central problem, pointing in particular to single-stock leveraged ETF products that received regulatory approval for launch in late May as a key driver of the recent surge in volatility. While the government has tightened regulations — including raising the minimum deposit requirement for leveraged products — Ren argued that "the side effects will remain unless the products themselves are halted."

The column also drew a parallel between South Korea's investment climate and China's. "In recent years, global asset managers have labeled China uninvestable due to policy failures and disregard for investors — and unfortunately, similar concerns are now being raised about South Korea," Ren wrote. She added that it was time for the Korean government to reflect on whether it knows what it is doing and whether first-time young investors are being properly protected.

The FSC rejected the column's claims directly. "South Korea's economy is showing stronger fundamentals than ever, as reflected in GDP growth and the current account balance," it said.

The commission said expectations surrounding the AI and semiconductor industries have pushed projected earnings for domestic companies above levels seen when share prices were at their peak. It noted that many domestic and foreign investment banks still see solid growth potential in the Korean market.

On the recent rise in volatility, the FSC said it had intensified since mid-June but attributed it to a combination of factors, adding that "the market's assessment is that investor sentiment is showing signs of recovery."

The commission said the government would maintain its commitment to market stability and was doing its utmost to manage volatility, including by working to stabilize concerns over single-stock leveraged products through corrective measures.

It added that the government plans to consistently pursue structural improvements to the capital market to strengthen its resilience and growth potential while managing short-term volatility.

The FSC also questioned the reliability of the data cited in the Bloomberg column. "Based on what has been confirmed so far, the statistics cited appear to contain inaccuracies, and their precise source has not been verified," it said.

The commission said that with South Korea emerging as an indispensable part of the global AI supply chain and a key investment destination, "there is absolutely no reason to worry that the country will be rated uninvestable on the basis of figures whose grounds are unclear."