There have been calls to mandate pension funds' investments in KOSDAQ and to provide tax benefits for long-term investments in the KOSDAQ market.
On the morning of the 30th, the KOSDAQ Association, the Korea Venture Capital Association, and the Korea Venture Capital Association held a press conference in Yeouido, Seoul, to propose policies for revitalizing the KOSDAQ market, voicing a common belief that the KOSDAQ market should be revitalized based on stable investment funds.
On this day, KOSDAQ Association Chairman Lee Dong-hoon proposed the 'legalization of the strategic asset allocation of the National Pension Service'. He argued that the investment proportion of KOSDAQ should be gradually increased to around 3% of the assets held by the National Pension Service.
Chairman Lee said, 'Through this, about 37 trillion won of long-term stable funds can flow into the KOSDAQ market' and explained that 'the institutionalization of KOSDAQ investment could be the starting point for structural reform of the capital market.'
Japan was mentioned as a noteworthy example. Japan expanded its domestic stock investment ratio from the previous 12% to 25%, securing the stability of capital supply. This led to an increase in corporate value, restored investor confidence, and, in the long term, even drove up the Nikkei index, according to Chairman Lee.
Furthermore, he emphasized that the KOSDAQ market is overlooked by institutional investors compared to KOSPI, making long-term investment difficult. Chairman Lee noted, 'Currently, the share of stocks held by institutions and corporations in the KOSDAQ market is only 30%', adding, 'Among the total assets managed by the National Pension Service, the domestic investment ratio is 12%, of which about 96% is concentrated in KOSPI stocks.'
There were also calls for urgent measures to induce long-term investment from individual investors as well as institutional investors like the National Pension Service. It was noted that tax benefits are essential to change the behavior of KOSDAQ investment, which is focused on short-term profit realization.
Chairman Lee specifically proposed a reduction in tax rates based on holding periods. He claimed that, in addition to the dividend income separation taxation plan currently under discussion in the National Assembly, the income tax rate should be further reduced in proportion to the holding period of KOSDAQ stocks.
Chairman Lee also added, 'The reason major shareholders have hesitated to pay dividends is mainly because most of them are subject to comprehensive income tax and thus effectively had to pay half of the dividends in taxes,' and he elaborated that 'a tax rate of 25% would be a more reasonable level than the currently discussed 35% dividend tax rate.'