Home > National > Politics

Rumor of Kim Jong-il's death

Published: 01 Dec. 2009, 17:42

Kim Jong-il may not be trading stocks on Seoul's Kospi any time soon, but he clearly wields a significant influence on the South Korean benchmark index.

The rumor that the North Korean leader had been killed circulated in the South Korean stock market yesterday. The main Kospi index, which had ended November at 1,555.60, reached over 1,560 points early in the morning before plummeting to as low as 1,542.76 by 10:30 a.m.

But just a few minutes later, the index returned to the 1,550-point territory. The Kospi closed at 1,569.72, up 14.12 points.

Kim was said to have been killed in Pyongyang, but it later turned out the rumor was based on an incorrect online news article that was published in September of last year. The report quoted a source privy to the operations of the North Korean military as saying that Kim had been attacked on a street in the North Korean capital.

The report also said a national emergency had been declared and that the South Korean government was in panic.

This isn't the first time that rumors related to Kim's health led to market fluctuations. On July 13 of this year, Kim was rumored to be suffering from pancreatic cancer, sending the Kospi down 50.50 points. It represented the second biggest daily drop of the year up to that point.

Last year, his conspicuous absence at the North Korean regime's 60th anniversary on Sept. 9 fanned speculation over his health. The Kospi plunged 22.15 points that day.

The South Korean government officials scoffed at the latest speculation. Unification Ministry spokesman Chun Hae-sung said he had not heard of any Kim Jong-il-related news, and another ministry official said the rumor was "groundless, unsubstantiated."

A government official suspected that a group of individuals might have been deliberately trying to disrupt the market and bring down the stock prices. The official said similar rumors tend to pop up periodically.

Market analysts, meanwhile, said that the way Kospi reacted to another Kim rumor only underlines the fragility of the market.

"Our market was shaken by some groundless rumor, and that proves just how weak our supply and demand structure is, and how frail our investor sentiment has been," said Cho Jae-hoon of Daewoo Securities. "We must approach any news related to North Korea with caution."

by Yoo Jee-ho[[email protected]]