KOSPI Drops Below 7,400 on Labor Dispute, AI Dividend Row; Recovers Later

The Seoul stock market experienced a turbulent day, with the KOSPI index dipping below the 7,400 mark. This downturn was primarily fueled by significant foreign sell-offs, exacerbated by a controversial proposal from a presidential aide regarding the distribution of profits from AI-driven companies. The notion of a 'national dividend' from AI earnings, as floated by Kim Yong-beom, a senior presidential secretary for policy, caused considerable confusion and apprehension among investors, as reported by international media like Bloomberg and the Financial Times. The lack of clarity surrounding the policy's specifics led to investor uncertainty, impacting the broader market.

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The losses are Rs 1 lakh crore, if you look at the quarter. In that context, how long can you keep it like this? Where is the oil? It used to be around $64 or $65. It has gone up to $115 in that basket.

Adding to the market's woes was the breakdown of labor negotiations at Samsung Electronics. The company's largest labor union, the Corporate Union Samsung Electronics Union, declared the mediation failure, signaling a potential strike. This news sent shockwaves through the market, with Samsung Electronics' stock experiencing a steep decline of over 5%. The labor dispute highlights ongoing tensions between management and workers regarding performance-based bonuses and their distribution, a critical issue for the tech giant.

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If I remember correctly, we haven't raised prices for the last four years. We're the only country in the world. Somebody said, 'the elections are over, now the price will rise.' 2022 was the last time we raised prices. There has been a general election in 2024, and there have been elections in the state government. It's not that prices will not go up. I'm saying the two are unrelated.

Despite the initial plunge, the KOSPI managed to stage a recovery in late morning trading. This rebound was attributed to strong buying interest from individual and institutional investors. While Samsung Electronics pared back some of its losses, its affiliate SK Hynix and SK Square saw gains, indicating a degree of resilience in the tech sector. The market's recovery underscores the dynamic nature of investor sentiment, which can shift rapidly based on domestic developments and global economic cues. The contrasting performance of different tech stocks also reflects the sector's internal dynamics and investor preferences.

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Eighty five per cent of our imports of crude, a large percentage used to come from there. But more importantly, our LPG, the cylinder gas, which you use in kitchens, about 60% used to come from the Strait of Hormuz. Now we had to make arrangements. I'm amazed at what we were able to do. Our domestic production of LPG prior to the crisis was 35,000 or 36,000 metric tons per day. We ramped up our domestic production from 36,000 to 54,000 metric tons. This by itself is a mind-boggling thing.