2023 Investment Report Card.

[k1976]

https://finance.yahoo.com/news/south-korea-watchdog-intensifies-crackdown-015014957.html


The watchdog said it uncovered several issues during a two-month inspection, including the practice of pushing bankers to aggressively market high-risk notes that are hard for retail investors to understand. The firms will be held “strictly accountable” for any illegal activities, according to the statement.

Huge losses will materialize as about 15.4 trillion won ($11.7 billion) worth of the equity-linked securities mature this year starting January, the FSS said. Roughly 20% of them will come due in the first quarter and another 32% in the following three months.

Even if the banks had systems in place, “we are not sure whether they did their duty to explain the product in a way that’s easy to understand, or whether customers just clicked and signed the contracts to buy something without knowing exactly what it is,” FSS Governor Lee Bokhyun told a press briefing on Thursday.

 

[k1976]

The probe shines the spotlight on investing trends in South Korea where an insufficient pension system and a general penchant for risky trades have prompted retail investors to pile into highly speculative bets. Authorities are now seeking to address the situation, with regulators creating a team to manage potential investor complaints related to possible losses from the equity-linked notes.

READ: China Rout Set to Roil $71 Billion Korea Market for Exotic Notes

The securities, which promise bond-like coupons and early redemptions unless the underlying assets drop below a certain level, have lured the country’s elderly during the low interest rates era. Investors often overlooked the risk that once that threshold is breached, losses can be magnified.

The notes in focus were mostly sold in 2021 when the HSCEI peaked above 12,000. The gauge is now trading at less than half that level.

The total outstanding balance of the notes is 19.3 trillion won with retail investors holding 91% of them, the FSS said. About 30% of the investors are aged 65 and above.

There are roughly 400,000 accounts of these products tied to the Hong Kong stock gauge and there has already been a “significant” number of complaints from retail investors, according to the financial watchdog.

Most Read from Bloomberg Businessweek

 

[k1976]

if buy and hold CSPX is better than VOO or SPY mainly because of the withholding tax, and also because CSPX is a acc ETF that does not re-distribute its dividend (better). It automatically use the dividend to buy more shares. So if intend to hold it for more than 10 years or more, CSPX is better for non US citizen.

Sadly I was one of them in the past that feed those jia liao bee.

No worries, u can always start to learn the finance stuff

Key rules
1. No free lunch in this world
2. When something too good to be true, it is like to be so.
3. People do not make money everyday