Taiwan, China tap market rescue funds. Why won't Korea?

China and Taiwan have each tapped market rescue funds to offset the recent sharp decline in stock prices, which began last week and was sparked by the U.S. midterm elections. The South Korean market, known as KOSPI, has plummeted by 11.13% since the start of November, bringing it down 42.87% from its June 22 record high of 9,114.55. This decline has raised concerns that the artificial intelligence boom may have reached its peak.

In an attempt to stabilize the market, the Korean government decided to temporarily suspend a rule that requires brokerages to maintain collateral equal to at least 140% of margin loans from Monday until January 31 next year. This measure aimed to prevent forced selling, which would further exacerbate the downward market trend. However, the regulation has not been able to satisfy the demands of 14.42 million retail investors.

These investors are urging the activation of a market stabilization fund due to a lack of substantial buyers.

Share buyback programs by Samsung Electronics and SK hynix did help to absorb some of the foreign selling that was contributing to the market's decline. However, these programs ended on October 21. While SK hynix has started another round of repurchases, the situation remains precarious as no new major buyers have emerged to support the market.