Koo Yoonchul: "KOSPI Is Not Overheated... Result Reflects Market Logic" (Comprehensive)

"Stock Market Still Below Advanced Economies"
"NXC 1 Trillion Won Sale and WGBI Capital Inflows"

Vice Prime Minister and Minister of Strategy and Finance Koo Yoon-chul commented on the sharp rise of the KOSPI on the 11th, stating, "This is the result of market logic being reflected, and I do not see it as overheating."

At a press briefing held at the Government Complex Sejong on the same day, Vice Prime Minister Koo said, "Based on the price-to-book ratio (PBR), the Korean stock market is still at a lower level compared to advanced economies." He added, "Given the operating profits of Samsung Electronics and SK hynix, and the state of the semiconductor industry driven by the AI cycle, the upward momentum is real." He further emphasized, "We will closely monitor the market to prevent any unfair practices or distortions."

Koo Yoon-chul, Deputy Prime Minister and Minister of Strategy and Finance, is leading the Emergency Economic Headquarters Meeting, the Economic Ministers' Meeting, and the Real Estate Ministers' Meeting on the 8th. Ministry of Strategy and Finance

Confidence in Growth and the Stock Market ... "Ranked 7th Globally"

On this day, the KOSPI index surpassed the 7,800 level during trading, marking a new all-time high. Vice Prime Minister Koo explained, "Since the launch of the new administration, the market capitalization of the Korean stock market has risen to 7th place in the world, surpassing Germany, France, and the United Kingdom. In the past, market capitalization stood at 2,270 trillion won, but it has now exceeded 6,100 trillion won."

The government also expressed confidence in the recent economic situation. Vice Prime Minister Koo stated, "Despite the challenging conditions of the Middle East war, we have operated an emergency economic response system and swiftly formulated and executed a supplementary budget, which has received high praise from major countries." He noted that the first-quarter growth rate reached 1.7%, exceeding market expectations, and that major global investment banks (IBs) have been raising their growth forecasts for Korea this year.

Vice Prime Minister Koo said, "I expect the economic growth rate this year to exceed 2%. We will announce specific figures in the economic growth strategy for the second half, to be released in June, after considering the semiconductor boom and the impact of the Middle East war." He also highlighted export and current account performance: "Korea's export ranking has risen to 5th in the world, surpassing Japan and Italy. In the first quarter, the current account surplus reached a record-high 73.3 billion dollars."

He also mentioned achievements in managing the exchange rate and inflation. "The exchange rate rose to the 1,530 won level at the end of March, but recently fell back to the 1,470 won range," he said. "Despite the international oil price rising to around 100 dollars per barrel, we managed to keep the April consumer price inflation rate at about 2.6% through measures such as the price cap system and fuel tax cuts."

In particular, the government reaffirmed its policy to maintain the price cap system. Vice Prime Minister Koo said, "We plan to maintain the price cap system until the situation in the Middle East stabilizes." He continued, "We will also push for amendments to the Price Stabilization Act, including the introduction of confiscation, whistleblower rewards, and new administrative fines for hoarding and price manipulation."

Regarding the real estate market, he reiterated the government's commitment to expanding supply. He stated, "We will monitor the market weekly following the end of the temporary suspension of the heavy capital gains tax on owners of multiple homes, and will steadfastly maintain our housing stability policy centered on actual owner-occupiers without any wavering." On the topic of tax reform, he took a cautious stance: "There are varying opinions among the public on strengthening property taxes for high-priced or non-owner-occupied homes. We are listening to a wide range of voices, and nothing has been decided yet."

He also expressed concerns about the potential for a strike by the Samsung Electronics labor union. Vice Prime Minister Koo said, "At a critical time when the entire world is seeking Korean semiconductor chips, we must not lose opportunities due to labor-management discord. I hope for an amicable resolution between labor and management."

On the 11th, when the KOSPI index surpassed the 7,800 mark for the first time intraday, an employee was monitoring the stock market and exchange rates in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On that day, the KOSPI opened at 7,775.31, up 277.31 points (3.70%) from the previous trading day, and the KOSDAQ opened at 1,212.88, up 5.16 points (0.43%). 2026.5.8 Photo by Yongjun Cho

NXC 1 Trillion Won Sale and WGBI Capital Inflows ... "Stabilizing FX and Bond Markets"

During the briefing, the government's sale of NXC shares received as inheritance tax payments was also highlighted as a major achievement. The government decided to resell a portion of the NXC shares it held through payment-in-kind inheritance tax to the company for about 1.0227 trillion won. The sale price was 5,558,000 won per share, exceeding the assessed value of 5,534,000 won at the time of payment-in-kind.

Vice Prime Minister Koo said, "We concluded the sale at a price higher than the price at which we received the shares as payment, making this an excellent case that even recognized a management control premium." He added, "This not only helps secure non-tax revenue, but also contributed to stabilizing the foreign exchange market." The government explained that the funds secured from this transaction will be reflected in this year's non-tax revenue budget. However, regarding the sovereign wealth fund, he clarified, "As the relevant law is still being pursued, there will not be any immediate capital inflow. In the future, once the sovereign wealth fund is established, it can be utilized to maximize national interests."

The government also actively highlighted the impact of Korea's inclusion in the World Government Bond Index (WGBI). According to the Ministry of Strategy and Finance, from March 30 to May 8, foreigners made a net purchase of 14.6 trillion won (approximately 9.9 billion dollars) in Korean government bonds. Vice Prime Minister Koo commented, "Inclusion in the WGBI is clear international recognition of Korea's economic stability and policy credibility. The inflow of long-term investment funds will greatly help stabilize the bond market, interest rates, and exchange rates." He projected, "If capital inflows continue through the end of the year, it will provide significant strength to the Korean economy."

As additional factors for foreign exchange market stability, the government cited the expansion of the National Pension Service's FX hedging and the introduction of the domestic Return Investment Account (RIA) system. In fact, the process of currency opening by new WGBI investors increased the supply of dollars, and following the National Pension Service's announcement of its 'New Framework,' some of the speculative offshore dollar buying has been mitigated.

The number of RIA accounts is also rapidly increasing. As of the 8th, there were 212,000 accounts, with balances exceeding 1.6 trillion won. The government expects that, since the 100% capital gains tax exemption applies until the end of this month for overseas stock sales, the possibility of further capital inflows is high.

Regarding fiscal policy direction, Vice Prime Minister Koo once again emphasized the "wise investor theory." He said, "During this period of historic transformation, such as the AI and green transitions, the government must make bold investments in areas that enhance future growth potential. Conversely, we will carry out intensive expenditure restructuring in less productive sectors." He explained further, "If we only focus on saving the budget, potential growth will decrease and the tax base will weaken. We will aim to increase the growth rate, expand the GDP denominator, and strengthen fiscal competitiveness."

On the 23rd, union members shouted slogans at the Samsung Electronics Labor Union Joint Struggle Headquarters' "Change Transparently, Realize the Cap Abolition - 4/23 Struggle Resolution Rally," held in front of Samsung Electronics Pyeongtaek Campus in Pyeongtaek City, Gyeonggi Province. Photo by Yonhap News.

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