South Korea Impeaches Second President In 2 Weeks, Stocks Face Significant Volatility

South Korea’s opposition-controlled National Assembly voted to impeach acting President Han Duck-soo on Friday, only two weeks after impeaching President Yoon Suk Yeol. 

South Korean stocks listed in the U.S. have faced significant volatility due to the recent political turmoil. The iShares MSCI South Korea ETF EWY, which tracks over 90 large and mid-sized South Korean companies, tumbled as much as 7% earlier in December to hit a 52-week low amid the political crisis. 

Shares of Coupang, Inc. CPNG, South Korea’s largest e-commerce platform, have fallen more than 12% over the past month. KB Financial Group Inc. KB, one of the country’s largest financial institutions, is down by more than 9% over the same period. 

South Korea’s currency has fallen amid the uncertainty to lows against the U.S. dollar not reached since the global financial crisis 15 years ago. 

The current political crisis began on Dec. 3 when President Yoon declared martial law, leading to his impeachment on Dec. 14. Prime Minister Han then assumed the role of acting president. 

The impeachment of acting President Han on Friday came after he refused to appoint three judges to the Constitutional Court which casts the final vote on presidential impeachments in the country. 

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Friday’s impeachment of President Han “suggests to the world the possibility that Korea’s political unrest could be prolonged and worsen,” Jeong Hoiok, a professor of political science at Myoungji University in Seoul, told the New York Times in an email. 

The second impeachment could cause “significant harm to the diplomacy and economic status that Korea has built so far,” Hoiok added. 

What’s Next: Friday’s impeachment of acting President Han leaves the country without its top two officials and puts Finance Minister Choi Sang-mok next in line to assume the acting presidency. 

“The most important thing right now is to minimize the confusion in state affairs,” Mr. Choi said. “The government will do its best to stabilize them.”

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