Lee Nak-yeon, Presidential Candidate's First Stock Meeting: "Hope Korea Premium Becomes a Reality"

Roundtable Hosted by Hong Seong-guk of the Democratic Party for Stock Market Development
Experts Say "More Investors Should Participate in the Stock Market"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] "There is still room for stock prices to rise." On the 2nd, former Democratic Party presidential candidate Lee Nak-yeon attended the 'Roundtable for the Development of the Stock Market as a Stepping Stone for the Middle-Class Economy' hosted by Assemblyman Hong Seong-guk at the Korea Financial Investment Association in Yeongdeungpo-gu, Seoul, and made this remark. Among presidential candidates, Lee was the first to participate in a stock-related roundtable.

The event was held to devise healthy development measures for the stock market amid growing public interest in stock investment. It also discussed the role of the stock market and policy support in wealth formation for the middle class and youth.

Lee said that the Korea Discount (the undervaluation of the Korean stock market) still remains in the domestic stock market. He emphasized, "Recently, the export ratio has risen to an almost unbelievable level, but stock price increases have not kept pace," adding, "Korea Discount can be resolved through social transparency, an investment environment that meets global standards, and economic training during adolescence."

He also said, "Our country is still included in the MSCI (Morgan Stanley Capital International) Emerging Markets Index, which is wrong," and added, "If the Korean stock market graduates from the Emerging Markets Index, overseas investors will show more interest."

Financial experts also participated in the roundtable and offered various opinions. Participants included Professor Kim Young-ik of Sogang University Graduate School of Economics, Kim Hak-gyun, Head of Research Center at Shin Young Securities, Jung Ui-jung, President of the Korea Stock Investment Federation, and Song Hong-seon, Senior Research Fellow of Fund and Pension at the Capital Market Institute.

The experts unanimously agreed that more investors should participate in the stock market. Professor Kim said, "Currently, deposit interest rates are below 1%, so investing in stocks to receive dividends is advantageous, but in the case of Samsung Electronics, foreign ownership exceeds 50%," adding, "Domestic investors must engage in long-term and dividend investing."

Center Director Kim explained, "As many domestic individual investors participate, the Korea Discount is also easing," and said, "If new stock market participants have successful experiences, it will be a factor in eliminating the Korea Discount in the future."

There was also a call to encourage more investors to engage in long-term investment. Senior Research Fellow Song said, "For long-term investment, investment products should be viewed from an overall perspective," and added, "Tax benefits should be provided for accounts like the Individual Savings Account (ISA)." Center Director Kim added, "Tax benefits for long-term investors are necessary to reduce the inherent short-term nature of investors and to achieve greater results."

The possibility of stock investment through retirement pensions was also discussed. Currently, a bill to introduce a 'default option' has been proposed in the National Assembly but has made no progress. The default option is a system where defined contribution (DC) retirement pension subscribers who do not give separate operational instructions are managed according to a pre-determined method, also called a pre-designated operation system. Lee said, "The default option bill proposed in the National Assembly has not progressed due to its characteristic caution, which is regrettable," and argued, "Pension funds can be used as industrial funds and can also guarantee stable returns for retirees."

The need to improve the short-selling system was also raised. President Jung pointed out, "Institutional investors and foreigners' mandatory short-selling repayment institutions and loan balance ratios should be equalized with those of individuals, and system improvements are necessary," adding, "An environment unfavorable to individuals has persisted for decades." In response, Lee said, "The short-selling system has been improved to some extent and it is a matter of management."

Finally, Lee raised a question about how inflation and interest rate hikes will affect the stock market in the future. Professor Kim responded, "The proportion of stocks in household assets in our country is only 22%, which is better than the U.S. where it exceeds 50%," adding, "It is rather an opportunity to purchase stocks cheaply." Center Director Kim said, "Last year's economic situation was not good, and some shocks may occur during the normalization process," but added, "In the long term, it is a matter of vitality, so I hope there will be many efforts for growth."

This content was produced with the assistance of AI translation services.