KOSPI · July 27, 1999
A rebound in the week Daewoo broke
+6.40%
single-day change vs previous close
Part of a longer stretch
The Daewoo collapse
early in it · 1999-07-09 → 1999-10-05, -23.00% over the whole period
What happened that day?
- The KOSPI rose 6.4% on the day
- Days earlier the Daewoo group had been placed under creditor control. It was then the country's second-largest conglomerate
- While other groups cut debt after the crisis, this one increased it, betting that growing through sales would carry it through. The bet failed
- The trouble was that investment trust products held its bonds in volume, and households had put their money into those products
- If redemptions crowd in, the trusts must dump the bonds, and that blocks funding for other companies too
- The government limited redemptions in stages and provided funds, producing this rebound. The bottom of the phase came in early October
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.