27/05/2026

BIZ & FINANCE WEDNESDAY | MAY 27, 2026

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Starbucks Korea sees ‘very significant’ drop in sales

South Korea to step up monitoring of investments in overseas private debt

o Shinsegae chairman takes ‘full responsibility’ for controversial ‘Tank Day’ marketing campaign SEOUL: Starbucks Korea has suffered a “very significant” drop in sales after a marketing campaign that evoked a brutal 1980 military crackdown on pro-democracy protesters triggered a public outcry, an official from the operator Shinsegae Group said yesterday. The retailer, whose subsidiary E-Mart owns the coffee chain in South Korea, has faced mounting criticism over its “Tank Day” tumbler marketing campaign launched on the anniversary of the May 18 Gwangju Uprising, when the military government deployed troops and tanks to suppress pro-democracy demonstrations. In a press conference yesterday, Shinsegae Group chairman Chung Yong-jin made a public apology and asked people not to take out any anger on Starbucks Korea employees and frontline staff. “I take it very seriously that Starbucks Korea’s inappropriate marketing hurt and angered many people,” Chung said. “I will take all responsibility for the incident.” Hundreds of people are estimated to have died or gone missing when the military dictatorship of Chun Doo-hwan cracked down on the protests in Gwangju. Many details remain unconfirmed, including who gave the order to open fire. Shares in Shinsegae fell as much as 2.8% in morning trade before reversing course to rise 1.7% as of 0116 GMT (9.16am in Malaysia), while E-Mart shares gained 2.3%, compared with a 3.2% rise in the benchmark Kospi. A Shinsegae official said sales had fallen sharply since the marketing controversy and an

SEOUL: South Korea will step up monitoring investments by domestic pension funds and banks in overseas private debt, the country’s financial watchdog said yesterday, as regulators worldwide become more concerned about private credit funds. The outstanding balance of private credit investments by Korean pension funds and other government-controlled retirement funds rose 55.3% to 25.4 trillion won (RM67 billion) as of the end of February, from 16.3 trillion won in 2023, South Korea’s Financial Supervisory Service said in a statement. Local financial institutions, including brokerages, insurers and credit unions, had about 30.5 trillion won worth of exposure to private debt as of February, the FSS said. The bulk of South Korea’s exposure was to debt in the United States or Europe, the FSS said. While local banks had limited exposure to credit tied to the technology sector, state-run funds had 21.8% exposure to the sector, the watchdog said. The announcement comes as global regulators tighten scrutiny over potential risks from the US$3.5 trillion private credit industry. Wealthy investors have queued up to withdraw money from a popular category of private credit funds amid concerns that AI could disrupt the industry. The Financial Times also reported last week that HSBC had paused a US$4 billion plan to invest in its own private credit funds. Still, the investment risk was at a “manageable level”, the FSS said, noting liquidity risks were not too high. South Korean financial firms’ exposure to private credit products accounted for less than 1% of their total asset value, while government-run funds also had a similar level of risk, it said. These Korean funds are mostly closed-end, which means investors cannot request redemptions before maturity, according to the FSS. The watchdog will monitor the situation closely for a while considering the market trend, the FSS said. – Reuters

Chungbows while making a public apology over Starbucks’ ‘Tank Day’ campaign in Seoul. – REUTERSPIC

aware of the gravity of the situation and had been receiving updates on the investigation and the company’s response, it added. Shinsegae fired the head of Starbucks Korea last week after apologising over the campaign. Starbucks Global also apologised and said an investigation had begun. Starbucks is the leading food and beverage chain in South Korea in terms of the estimated number of customers in the six months to February, according to data firm WISEAPP. Shinsegae operates Starbucks Korea through SCK Company, which is 67.5% owned by E-Mart and 32.5% by Singapore’s sovereign wealth fund GIC, according to a company filing. Chung’s apology “seemed sincere” and Shinsegae’s internal probe appeared to have been “wrapped up well”, a spokesperson for ruling Democratic Party was reported as saying by the Yonhap news agency. – Reuters to ministry data based on figures from the International Monetary Fund. Both Germany and China have seen their net external assets bolstered by annual trade surpluses. Japan, meanwhile, saw the growth of its net external assets contained partly because its external liabilities also swelled significantly. This is due to the strong performance of the Japanese stock market, which led to a ¥62.2 trillion upward valuation of Japanese securities held by non-resident investors. – Reuters

internal investigation was focused on whether there had been any premeditation or intentional wrongdoing by management or employees. “While sales are not our main concern at the moment, we have seen a very significant drop,” said the official. Starbucks Korea’s e-commerce team organised the campaign and received final approval from team leaders and executives, the official said. The investigation had not been able to conclude whether there was intentional wrongdoing, but the incident exposed serious flaws in Starbucks Korea’s risk management framework, the company said. The e-commerce team had been overly focused on sales amid a large volume of weekly promotional events, leading staff to approve the campaign without proper review or legal scrutiny, it said. Starbucks global headquarters in the US is

Japan slips to world’s third-largest creditor behind China TOKYO: Japan fell behind China to rank as the world’s third-largest net creditor in 2025, marking a further decline in global rankings despite its net external assets hitting an all-time record, the Finance Ministry said yesterday. overseas investment, mergers and acquisitions, as well as valuation gains on foreign securities held by residents.

However, after losing the top spot to Germany the previous year for the first time in 34 years, Japan has now surrendered its position as the world’s second-largest creditor to China, falling to third place in the global rankings. Germany remained the world’s top creditor with ¥675.5 trillion in net external assets, followed by China at ¥636.3 trillion, according

Net external assets held by the Japanese government, businesses and individuals, rose 4.4% from a year earlier to ¥561.75 trillion (RM14 trillion). That marked the eighth straight year of growth, driven by Japanese companies’ robust

HK stocks flat as chipmaking frenzy offsets capital control fears SHANGHAI: The Hong Kong stock market, which reopened yesterday after a public holiday, ended flat as excitement toward chipmaking overcame jitters around Beijing’s crackdown on illegal cross-border trading. could affect as much as HK$294 billion (RM149 billion) in Hong Kong, Kaiyuan Securities estimates. An index of Hong Kong small-caps – which are vulnerable to reduced liquidity – fell 2%. Shares of Bright Smart, a small broker in Hong Kong, tumbled 5%. But China Securities Co jumped 4% in Hong Kong and 6% in Shanghai.

frenzy around chipmaking, after Chinese tech champion Huawei Technologies said on Monday it will make industry-leading semiconductors using a new technology in five years. An index tracking Hong Kong-listed chipmakers surged 6%, led by Chinese chip giants Hua Hong Semiconductor and Semiconductor Manufacturing International Corp. “I’m very bullish toward SMIC. It’s China’s answer to TSMC,“ fund manager Yuan said, referring to the Taiwanese chip foundry. “SMIC’s strategic importance is even greater than companies like PetroChina and CATL.” In China, tech shares corrected after Monday’s jump. – Reuters

Yuan Yuwei, hedge fund manager at Trinity Synergy Investments, said China’s tighter capital control could hit Hong Kong-listed small-caps, but the impact on the broader market would be limited. “I believe we are still in a big bull run underpinned by hard technology,” he said. Hong Kong’s Hang Seng Index swung between losses and gains before ending the session flat. China’s blue-chip CSI300 Index rose 0.5% while the Shanghai Composite Index dropped 0.2%.

Shanghai stocks dipped as tech shares corrected, but big investment banks led blue-chips higher on bets they will benefit from regulators’ clamp-down on brokers moving Chinese money offshore without a license. China on Friday launched an industry-wide crackdown on illegal cross-border investment, and punished online brokers Tiger, Futu and Longbridge. The campaign, which requires a wind-down of illegitimate trading accounts in two years,

Other major Chinese investment banks, including China International Capital Co and China Galaxy Securities also rose sharply. “Demand for global asset allocation will persist, but increasingly shift toward compliant channels,“ Guotai Haitong Securities said in a report, recommending major brokers with a global footprint and stakes in top mutual fund companies. Mood in Hong Kong was also aided by a