KOREAN MARKET: KOREANS PAY FOR LOSS OF HOSTILE SOUTH IN ‘THE RUMBLE’
Korea’s stock market plunged nearly 14 percent on Monday after South Korea’s spy agency said it had found the head of the nation’s most powerful military intelligence agency.
The agency said in a statement it found Choi Soon-sil, a former military intelligence chief, as a spy and traitor.
It said Choi was detained in February and was released without charges.
It cited unspecified information as it made its announcement.
The stock market is currently down more than 11 percent from its all-time high of 7,500 won ($6.60) on Friday.
South Korea’s Ministry of Unification said in the statement that Choi was found hiding in the Seoul Central District and detained on the basis of information received by the intelligence agency during the operation to find him.
The statement added that the investigation is ongoing and that the person being detained is cooperating with the authorities.
As the market plunged, South Korea has been on edge since Friday when a South Korean spy agency found that a senior military intelligence officer had taken control of the country’s most prominent intelligence agency, the Central Military Commission.
That was followed by a statement from President Park Geun-hye that it was time to take drastic action.
In an interview on Sunday, the president said the military had been operating with the intention of winning over the South Korean public and that she will call a general election.
Since then, Park has warned that the military could use the military’s economic power to coerce the country into accepting its demands.
After the president’s comments, markets in South Korea fell, wiping $5.5 billion off the market.
“The market has lost nearly 14% in less than 24 hours,” an online stock market tracker said in Seoul.
Analysts said the markets’ losses could signal the market’s slowest performance since March 2014.
An online stock broker also said that markets were still reeling from the shock of the spy agency’s announcement.
MarketWatch reported that a major brokerage firm in Seoul said it was reviewing the results.
Park, in her speech, said she would call an election in the coming days.
Investors have been worried about how the economy could perform after the spy scandal erupted in March.
Last week, South Korean President Park Chung-hee said that South Korea was prepared to use economic power and military might to try to win over the public in order to bring the economy back to the growth rate of the 1990s.
However, the economy has been struggling to recover from the economic downturn that followed the spy scandals and the economy is now projected to shrink by 0.4 percent this year, according to data from the National Institute of Economic Research.
There were more than 5,600 people detained in South Korean prisons for spying in March, according a government statement, a sharp increase from just 2,100 in February.
Some analysts said the spy case was likely the biggest embarrassment for South Korea since it accused Pyongyang of a cyberattack on its nuclear weapons program.
President Park said that the government was prepared for a possible election, but it would be difficult to convince the people of South Korea that the country has recovered from the fallout from the spy cases, said Seongjin Lee, head of Asia and South Asia at Credit Suisse.
A poll released by the agency in early March found that 58 percent of respondents said they believe the South Koreans’ economy has declined, with 37 percent saying the economy was on the mend.
Other factors that contributed to the decline included rising costs of living and the slow recovery from the collapse of the global financial markets in the second half of 2016, Lee said.
On Sunday, South Koreans voted in a referendum on whether to extend the countrys military’s authority to spy on foreign officials.
The referendum, which will take place on Tuesday, will decide whether to renew the countrysdemand, or national intelligence agency or the military.
While the election has been held, many analysts and investors are betting that it will not have an impact on the economy.
Many South Koreans, including many of the presidents supporters, said that her election would have no impact on their economic conditions, while others said the vote was a signal that the public will not accept her and her agenda.
If she is elected, South KOREA will have the longest period of uninterrupted economic growth since the Korean War in the 1950s.