The KOSPI market crash erased 509 trillion South Korean won, or about $370 billion, from South Korea’s stock market within six hours on May 15. The sell-off came as emerging-market assets weakened under pressure from rising oil prices.
Bloomberg reported that South Korea led losses among emerging markets after two straight sessions of growth. Shares and currencies across the group declined as oil prices added pressure to risk assets.
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KOSPI Market Crash Deepens After Record High
The main South Korean index finished at 7,493.18. The KOSPI closed higher, up 0.8%, to a record high of 8,046.78 points earlier in the session.
The strong turnaround made the session a KOSPI market collapse. The index finished more than 6% lower than its earlier levels.
Selling pressure throughout the session came from foreign investors. The KOSPI technology sector saw the heaviest pressure, ending with more than $2.8 billion of net outflows, as per Bloomberg.
Samsung Electronics and SK Hynix both saw their profits plummet. On May 15, Samsung Electronics fell 8.6% and SK Hynix dropped 7.66%.
It was the weakest performance for both stocks since early May. Samsung Electronics is still up more than 125% this year, and SK Hynix has risen about 180%.
The KOSPI market crash followed a strong rally in South Korean equities. Samsung Electronics Co. and rival SK Hynix Inc. contributed to approximately 80% of the increase in that index that has gained over 50% this year.
OKX Eyes Coinone Stake as Korean Crypto Deals Grow
The sink in the market came at a time when South Korea’s crypto space was also attracting new investment. OKX and Korea Investment & Securities are seeking to buy about 20% stakes in Coinone, according to Yonhap News Agency.
Coinone is expected to issue new shares as part of the proposed deal. According to Yonhap, the deal would not change the current exchange’s management system.
If approved, OKX will be the second international exchange to hold a large position in a South Korean crypto platform. Earlier, Binance had acquired a stake in Gopax.
The exchange is one of only five South Korean crypto exchanges approved to provide fiat-to-crypto trading services. Nonetheless, Upbit and Bithumb remain the local market leaders.
This came after a different massive deal involving the same market. Hana Bank confirmed it will purchase a $670 million stake in Dunamu, the parent of crypto exchange Upbit.
South Korea Crypto Ownership Rules Face New Scrutiny
In early February, Mirae Asset struck an agreement to take a 92% stake in Korbit. Korbit is among the top five crypto exchanges in South Korea.
The KOSPI market crash came even after regulators were still discussing the new ownership rule of crypto exchanges. Authorities are looking at a 34% ownership cap for companies and 20% for individuals, local reports said.
Currently, Coinone ownership belongs to several significant shareholders. The One Group purchased a 34.3% stake, Cha Myung-hoon a 19.14% stake, Com2uS Holdings a 21.95% stake, and Com2uS Plus a 16.47% stake.
The KOSPI market crash showed how quickly foreign selling hit South Korea’s technology-heavy market. At the same time, the Coinone talks showed continued deal activity in the country’s crypto sector.
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