Securities-Related Organizations: "Oversold Zone... Institutional Role Needed to Restore Investor Sentiment"

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[Asia Economy Reporter Minji Lee] Securities-related institutions have called for an active role of institutional investors to restore investment sentiment damaged by negative domestic and international environments.

On the 12th, the Korea Exchange held a meeting jointly with the Korea Financial Investment Association to review the recently deteriorated market situation and confirm the roles of related institutions for stabilizing investment sentiment.

Son Byung-doo, Chairman of the Korea Exchange who attended the meeting, said, “Investment sentiment is rapidly shrinking due to the challenging domestic and international environment surrounding our stock market, including the big step hike in the base interest rate,” and requested the association, “An active role of institutional investors is necessary to ease the oversold trend.”

Chairman Son added, “We will ensure that listed companies can actively utilize the government’s extended measures to expand the limit on treasury stock acquisition,” and explained, “We will make thorough preparations related to the injection of the Stabilization Fund.”

He also added, “We will strictly respond to unfair trading practices exploiting the stock price decline and swiftly detect suspicious unfair trading such as illegal short selling, taking necessary measures including notifying relevant agencies.”

Na Jae-cheol, Chairman of the Korea Financial Investment Association, said, “Institutional investors, who serve as the foundation of our stock market, will perform the necessary roles to act as the central axis of market supply and demand from a mid- to long-term perspective,” and mentioned, “We will strive to prevent the spread of anxiety by providing accurate and objective information to the market in cooperation with the Research Center.”

In addition, Jung Gu-yong, Chairman of the Listed Companies Association, stated, “We will encourage listed companies to actively engage in shareholder returns, such as expanding treasury stock purchases and increasing dividend rates, within the scope that does not harm the sustainability of corporate investment.” Kang Wang-rak, Vice Chairman of the KOSDAQ Association, said, “We will encourage listed corporations to adopt shareholder return policies that maximize shareholder interests, such as expanding dividends.”

Regarding the recent market situation, Kim Hak-gyun, Center Head at Shin Young Securities, diagnosed, “The KOSPI is undervalued to the extent that it is trading below the net asset value of listed companies, so it is important to observe the market situation without selling at low prices,” and added, “It is a time to hold stocks and refrain from attempts to recover losses at once through leverage investment.”

Park Jong-hoon, Economist at SC Bank, said, “The current market is focusing on economic indicators that may be caused by policy changes of the Federal Reserve (Fed),” and added, “Although the downward trend is expected to continue, it is also necessary to keep in mind that the upward trend can be steep depending on changes in the Fed’s stance.”

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