The emergence of 'Seohak Gaemi' (individual investors purchasing overseas stocks) has caused the value of U.S. stocks held to exceed $100 billion for the first time, with more than half of the public indicating a preference for the U.S. stock market over the domestic market.
According to the Korea Chamber of Commerce and Industry, a survey titled 'Public Perception of the Korea-U.S. Capital Market' was conducted online from the 17th to the 18th of this month through its platform, 'Sopul,' involving 1,505 participants. Among the respondents, 54.5% expressed a preference for the U.S. capital market over Korea, while 23.1% preferred the domestic capital market, and 22.4% indicated similar preferences for both markets.
The main reasons for investing in the U.S. stock market were the innovations and revenues of corporations (27.2%). Other reasons included active shareholder returns (21.3%), stagnation of the domestic stock market (17.5%), economic prosperity in the U.S. (15.4%), transparent corporate governance (14.8%), and investor-friendly tax policies and support (3.8%).
Investment by domestic investors in the U.S. is expected to increase further. A total of 79.0% expressed their intention to expand investments in the U.S. capital market, while 15.3% indicated they would maintain their current investment level, and 5.7% planned to reduce it. Among those who said they would expand investments in the Korean capital market, 54.3% stated they would do so, while 26.6% would maintain the status quo, and 19.1% intended to reduce their investments.
Respondents identified stagnation of innovation among domestic corporations (34.6%) as a reason for the underperformance of the domestic capital market. They also mentioned regulatory-centered corporate and financial policies (23.6%), a short-term investment culture (17.5%), inadequate governance and shareholder returns (15.4%), and insufficient support such as tax benefits for financial investments (6.8%).
They argued that tax incentives are necessary to enhance the value of Korea's capital market. Among the respondents, 26.0% prioritized the introduction of tax benefits for long-term stock holdings. In the U.S., a tax reduction on capital gains applies to stocks held for more than one year, but there are no such tax benefits in Korea based on holding periods. Respondents also mentioned tax reductions for dividends (21.8%).
KORCHAM's Research Head Kang Seok-gu noted, 'Capital market enhancement should promote the innovative growth of corporations and increase incentives for investors in those corporations,' adding, 'I hope the National Assembly discusses amendments to the capital market law that only address problematic issues.'