Despite the impeachment motion against President Yoon Suk-yeol passing through the National Assembly, the KOSPI index closed down. Foreigners continue to sell off their holdings. The exchange rate of the won against the U.S. dollar also showed no signs of reversal.
Tension persists in the securities industry. If the Trump administration enters its second term, the exchange rate of the won against the U.S. dollar (won/dollar exchange rate) may become a new normal at 1,400 won.
On the 16th, the KOSPI index traded at 2,488.97, down 5.49 points (0.22%) from the previous day. This was the first trading day after President Yoon's impeachment motion was passed with the consent of more than two-thirds of the members of the National Assembly. While there were expectations that the index would rise before the market opened due to hopes of political uncertainty being resolved, the predictions did not materialize.
The KOSPI index started lower but briefly rose to 2,515.62 points. However, after 10:30 a.m., it fell below the 2,500 level and subsequently turned downward. Until noon, it fluctuated around the closing level of the previous day (2,494.46 points), but a drop became evident after 1 p.m.
Foreigners sold off 478.2 billion won worth of shares, leading to the index's decline. In contrast, individuals purchased 368.7 billion won and institutions bought 2.2 billion won. Foreigners had been on a selling streak, except for one day following the declaration of martial law (Dec. 9). After selling 405.8 billion won on the day martial law was declared, they continued with 399.7 billion won on the 5th and 434 billion won on the 6th, selling nearly 500 billion won on this day alone.
In contrast, the KOSDAQ index closed up 4.79 points (0.69%) to 698.52. Although there were minor fluctuations, the range was higher than the previous day. In the KOSDAQ market, individuals recorded a net buying of 209 billion won, while foreigners had a net selling of 116.8 billion won, and institutions sold 77.1 billion won.
As the decision on President Yoon's impeachment is handed over to the Constitutional Court, political theme stocks have surged. Stocks related to Woo Won-sik, Speaker of the National Assembly, who played a role in lifting the martial law on the night of the 3rd, and Lee Jun-seok, a lawmaker from the Reform Party who declared his candidacy for the presidential election, rose sharply.
Bankwearglobal, linked to Speaker Woo due to both having graduated from Kyungdong High School, closed at 7,250 won, up 29.93% from the previous day. Hyosung O&B was also associated with Speaker Woo simply because its headquarters is located in his electoral district of Nowon-gu, Seoul; this stock jumped 29.86% on that day as well.
Stocks related to lawmaker Lee Jun-seok, including Sambo Industries and Nexti, also recorded limits on the rise that day. Sambo Industries became a political theme stock because Lee's father previously managed the court protection of Hydrogen Power, a subsidiary of Sambo Industries. Nexti is also related to Lee's father, who reportedly served as an audit committee member at the company.
Conversely, stocks related to Han Dong-hoon, head of the People Power Party, plummeted after he stepped down as party leader after 146 days. D&T&C R&D was categorized as a theme stock because one of its outside directors is an alumnus of the same university as the party leader; it plunged 20.00% on that day.
Regarding the political theme stocks, the Financial Supervisory Service (FSS) has warned multiple times that the reasons for being grouped as such are simplistic, such as connections by school ties. The FSS cautioned, "Do not be swayed by baseless rumors and make sure to verify the source of information thoroughly," and noted that "producing or distributing false information, or using it could lead to punishment for unfair trading, so caution is advised."
Meanwhile, on this day, the won/dollar exchange rate finished the regular market at 1,435.0 won, up 2.0 won. In the securities industry, it is believed that the exchange rate will not fall below 1,400 won until the end of the year.
Lee Jae-man, a Research Institute at Hana Securities, said, "Continuing American exceptionalism and the trade disputes of a potential second Trump term could lead to a strong dollar," adding that "the won/dollar exchange rate is likely to remain in the 1,400 won range until the first half of next year."