Business

Three years ago, Kang Jong Hyun, 62, visited a major commercial bank with the intention of utilising the retirement savings he had accumulated through a lifetime of dedicated work. Drawing on decades of experience, he is striving to formulate an investment plan for a better old age life. In an interaction with a banker, he revealed that despite clearly expressing a preference for safe investments, he was advised to consider Equity Linked Securities products linked to the performance of the Hang Seng China Enterprises Index. "I told the banker I dislike risky investments like funds and prefer something safe," Kang said.  However, influenced by the banker's recommendation, he subscribed to ELS instead of opting for regular interest-bearing deposits.  "The banker assured me this product was not risky and similar to a deposit. I fell into this situation simply because I trusted the bank. I can't even tell my family, and I can't sleep at night," Kang said. According to the Financial Supervisory Service's investigation in January, three out of 10 bank ELS investors are 65 or older and often need help comprehending the complex structure of derivative products. Furthermore, 1 out of every 10 investors were first-time subscribers, indicating a need for familiarity with such financial instruments.  The criterion for considering bank investors as elderly is set at 65 in South Korea, emphasising the heightened responsibility to exercise caution when advising and recommending investments to these senior individuals. As of November 2023, the total volume of Hong Kong index-linked ELS products sold to investors amounted to 19.3 trillion KRW (around HK$ 11.3 billion). Among them, about 82.1% were sold by banks, according to the Financial Services Commission of South Korea. As a derivative, the ELS product linked to HSCEI aims to pay customers with a fixed return based on the …

The cryptocurrency has become one of the significant investments in South Korea.  According to Statista Market Insight, the total revenue of the cryptocurrency market has doubled from 2018 to HK$ 12.3 million in 2023 and recorded the highest in 2021 with a value of HK$ 33.2 million. Meanwhile, the total number of cryptocurrency users has increased more than seven times in the last five years since 2018. As the cryptocurrency market grows, so does the incidence of fraud, mainly through fake cryptocurrency exchanges, highlighting the need for increased vigilance among investors in South Korea. "When I tried to cash out profits, the cryptocurrency exchange started giving me the runaround. They kept stalling and making up excuses left and right,” said  Kim Hyun Jin, 41, a cryptocurrency scam victim by the BTC Man, from South Korea. Kim added that to make matters worse, they started demanding more money, claiming it was for taxes or setting up virtual accounts. After stumbling upon a seemingly innocent stock discussion group, Kim was defrauded of around HK$ 350,000 in an online group chat. The group initially offered daily market insights, stock recommendations, and testimonials from purportedly successful members, which attracted Kim to join the telegram community. However, the chatroom was silent after Kim did not get his guaranteed return.  “I reached out to the group leader for guidance. Surprisingly, the leader offered to make a substantial personal investment to cover my losses. It seemed like the leader genuinely cared about my well-being and success in trading,” Kim said. However, the exchange claimed Kim needed to deposit more money to withdraw his profit. When Kim contacted the admin again, he was kicked out of the chat room.  “I got a bunch of empty promises, and it left me feeling pissed off and hopeless," Kim said. Serena …