[Minute to Read] S. Korean stocks crash again as U.S. recession fears resurface

The Minute to Read (Weekend) series provides a quick overview of significant events in Korea from the week, conveniently condensed into a one-minute read. Here’s a recap of what happened this week: Sept. 2-6.

An electronic board at KEB Hana Bank headquarters in Seoul shows the KOSPI index closing at 2,580.80, down 83.83 points, and the KOSDAQ index at 731.75, down 28.62 points on Sept. 4, 2024. /News1

S. Korean stocks crash again as U.S. recession fears resurface

Major Asian stock markets, including South Korea, Japan, and Taiwan, fell sharply by 3–4% on Sept. 4. The KOSPI dropped 3.15% to 2,580.80. Foreign and institutional investors sold net amounts of 986 billion won and 731 billion won, respectively, while individual investors bought 1.648 trillion won. Samsung Electronics and SK Hynix saw declines of 3.45% and 8.02%, respectively, with Samsung’s stock falling to 69,800 won, breaking the 70,000-won mark. The KOSDAQ also fell 3.76% to 731.75. This drop is the largest since “Black Monday” on Aug. 5, driven by renewed U.S. recession fears and concerns about an AI bubble. Semiconductor and tech sectors in South Korea, Japan, and Taiwan were particularly hard hit. Investors remain concerned about whether this will be a temporary shock or a prolonged downturn.

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S. Korea considers 10-day payment rule to prevent e-commerce crises

The South Korean government is considering a new regulation that would mandate e-commerce platforms to pay merchants within 10 days of a customer’s purchase. This measure aims to address issues like the recent “TMON-WeMakePrice crisis” and prevent platforms from delaying payments to sellers. The Korea Fair Trade Commission (KFTC) has drafted an amendment to the Act on Fair Transactions in Large Retail Business, proposing a 10 to 20-day payment window for platforms. The KFTC will finalize the settlement period after consulting with industry stakeholders.

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Frieze, Kiaf art fairs open in Seoul

Global art fairs Frieze Seoul and Kiaf Seoul opened simultaneously at COEX on Sept. 4. Frieze, one of the world’s top art fairs alongside Art Basel, debuted in Seoul in 2022, marking a leap for the South Korean art market. This year’s Frieze Seoul, running from Sept. 4 to 7, features 110 international and domestic galleries, slightly fewer than last year. Prominent galleries include Gagosian, Hauser & Wirth, David Zwirner, and Lisson Gallery, as well as Korean galleries like Gallery Hyundai, Kukje Gallery, and Arario Gallery.

Gallery Hyundai showcases Jeon Joon-ho’s computer-based sculptures, while Gagosian presents Derek Adams’ Seoul solo debut alongside works by Maurizio Cattelan and Paik Nam-june. Hauser & Wirth features pieces by Rita Ackermann, Louise Bourgeois, Ed Clark, and Nicolas Party. Frieze Seoul director Patrick Lee noted that 23 galleries are participating for the first time, highlighting the fair’s expanding influence.

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Actor Yoo Ah-in arrives at the Seoul Central District Court for his first trial sentencing on Sept. 3, 2024. /Newsis

Actor Yoo Ah-in sentenced to prison for drug abuse

Actor Yoo Ah-in (38), whose real name is Uhm Hong-sik, was sentenced to one year in prison and taken into custody in his first trial for habitual drug use. The Seoul Central District Court also imposed a 2 million won fine (about $1,490), ordered him to forfeit 1.5 million won, and complete 80 hours of drug rehabilitation. Prosecutors had originally sought a four-year sentence.

The court criticized Yoo for exploiting medical loopholes to obtain drugs, highlighting the seriousness of his actions. It noted Yoo’s substantial dependence on psychoactive substances and the significant risk of reoffending. However, the court also acknowledged his long struggle with depression and pain-induced insomnia that contributed to his drug use, considering his honesty and efforts to overcome addiction in the sentencing.

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S. Korea’s EV sales surge in August, but market concerns loom

Domestic electric vehicle sales by South Korean automakers reached 11,280 units last month, up 90% from 5,949 units in August last year and 9% from July. However, the surge is largely due to the new models released in July and August. The August figures also reflect the impact of a fire involving a Mercedes-Benz EV in Incheon, on Aug. 1. Excluding Kia’s EV3, released in July, and Hyundai’s Casper Electric, launched in August, the decline in EV demand becomes more apparent. With a cooling EV market and growing concerns from the Cheongna fire, fears of a market contraction in the second half of the year are rising.

The top-selling EVs last month were Kia’s EV3 with 4,002 units and Hyundai’s Casper Electric with 1,439 units, making up about 48% of total sales. Without these models, EV sales would have fallen about 30% compared to July, contrasting with a 4% drop in overall domestic vehicle sales by the five major automakers, which totaled 105,504 units in August.

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Prosecutors raid home of ex-President Moon’s daughter

South Korean prosecutors investigating allegations of preferential hiring involving former President Moon Jae-in’s ex-son-in-law, surnamed Seo, at Thai Eastar Jet have extended their inquiry to Moon’s daughter. The Jeonju District Prosecutor’s Office has conducted raids at her residence, exhibition planning company in Seoul, and her vacation property on Jeju Island. She purchased the Jeju property for 380 million won in July 2022 from Father Song Gi-in, a mentor to her father.

The search warrant reportedly named former President Moon as a suspect in the bribery case, which involves over 223 million won received by Seo from July 2018 to April 2020 as salary and living expenses while working at the Thai airline owned by former Democratic Party lawmaker Lee Sang-jik. Legal experts suggest that a summons for Moon is likely.

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Garmin climbs to 3rd in global smartwatch market with rapid growth

Garmin is making significant strides in the global smartwatch market, posing a threat to Apple and Samsung. This surge is attributed to the rising global trend of outdoor fitness activities, such as running. According to market researcher Canalys on Sept. 2, Apple led with a 49% market share in the second quarter of this year, followed by Samsung with 15%. Garmin, which had a market share of about 5% in 2022, increased to 11% in the same period, surpassing Huawei to become the third-largest player in the market.

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Garmin's newly launched premium smartwatches. /Courtesy of Garmin Korea

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[The Chosun Daily]

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