Stock market transparency emphasized by Lee as Kospi hits record high
President Lee's Push for Capital Market Strengthening Boosts South Korea's Stock Market
In a bid to bolster South Korea's domestic stock market, President Lee Jae Myung has outlined plans to eliminate factors causing market distrust and normalise the capital market. During a news conference on September 11, President Lee called for these measures, highlighting the need for a more predictable and less volatile market.
The President's initiatives seem to be yielding results. The Kospi, South Korea's main stock market index, closed 1.4% higher on Thursday at 3,461.30 points, marking a new record high. This rise follows an 11-day winning streak, with the market having rallied 8.6% in September alone.
Samsung Electronics, a significant player in the South Korean market, saw its shares trading above 80,000 won for the first time since mid-August. The memory chip-maker SK hynix also experienced growth, closing 5.8% higher and reaching a record high.
President Lee's personal investments in exchange-traded funds (ETFs) have been successful, with a 26.4% return since his inauguration in June. The President plans to invest a total of 100 million won throughout his term in baskets of South Korean stocks.
To further boost market transparency and tackle structural problems, President Lee announced that state-run institutions will invest in stock baskets of the South Korean economy from 2023 to 2025. Additionally, another revision was passed to introduce a cumulative voting system for listed companies with assets of more than 2 trillion won, aiming to empower smaller shareholders.
The ruling bloc-led revision of the Commercial Act also expanded the fiduciary duty of board members to protect the interests of minority shareholders. President Lee pledged to eliminate stock price manipulation and unfair practices regarding corporate disclosures.
Lee Jae Myung also addressed the issue of low allocation of South Korean pension funds to domestic shares due to a lack of investor trust. He stated that this issue would be addressed as part of the Lee administration's five-year blueprint, which includes South Korea's inclusion in the MSCI Developed Market Index as another policy goal.
President Lee's spokesperson, Kang Yu-jung, stated that the revelation of investments is a sort of assurance to stock investors. He emphasised that the President's actions demonstrate a commitment to fostering a strong and transparent capital market in South Korea.
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