"The Korean stock market still has ample upside potential, driven by domestic corporations' improving earnings and policies to advance the capital market."
Chairperson Jeong Eun-bo of the Korea Exchange (KRX) stated accordingly at a seminar held on the 11th titled "A leap toward the KOSPI 5000 era."
Co-hosted by the Korea Exchange (KRX) and the Korea Capital Market Institute, the event took place at the exchange's Seoul headquarters. At the seminar, which drew about 80 experts from the financial investment industry, conversations surfaced across the venue expressing both expectations for further KOSPI gains and concerns about recent volatility.
In opening remarks, Jeong said, "Major global investment banks are projecting that the KOSPI could rise to as high as 6,000 points," adding, "We will strengthen our capital market's global competitiveness by building a 24-hour transaction system, shortening settlement times, overhauling market structure, and improving entry and exit systems."
National Assembly member O Gi-hyeong, who serves as Chairperson of the Democratic Party of Korea's "KOSPI 5000 Special Committee," said in congratulatory remarks, "Until now, policies have been driven by the government and political circles, but from now on the market's active participation is needed," adding, "The political sphere will also do its best to maintain consistency in policy direction."
◇ "Achieving KOSPI 5000 next year is possible… HBM to see high growth over the next three years"
At the seminar, the first keynote presentation was delivered by Kim Dong-Won, head of research at KB Securities. Kim said, "This year, the government's measures to revitalize the capital market and external dollar-weakness factors stood out," projecting that the KOSPI index will reach 5,000 points.
Kim said, "The high-bandwidth memory (HBM) market is expected to grow rapidly over the next three years," adding, "Starting next year, the HBM supply landscape will form around Korean companies, including SK hynix and Samsung Electronics."
However, he cited as a variable the possibility that the growth trajectory of the semiconductor market and corporations could adjust. Kim said, "Share prices have risen a lot since the start of the year, but there is no rise without a correction," adding, "Since both the market and individual stocks climb again after healthy corrections, semiconductor corporations are expected to grow over the long term."
The ensuing panel discussion presented tasks needed for Korea's securities market to further advance.
Yu Jong-u, head of research at Korea Investment & Securities, emphasized sustainable valuation (corporate value) and strengthening domestic facility investment as tasks needed for the securities market. Yu said, "Measures such as amending the Commercial Act and 25% separate taxation of dividend income have already been largely priced into the market," adding, "Now, dividends must actually reach small shareholders for valuations to rise without slowing."
Yu also said, "Due to recent tariff negotiations with the United States, the likelihood of increased U.S. facility investment has grown," adding, "It is now necessary to adopt industrial policies that strengthen incentives for domestic investment rather than attracting overseas corporations." He explained, "If policy support is provided quickly under the leadership of the nation and the government to industries that need it, the 'KOSPI 5000 era' can be realized even faster."
Lee Seung-u, head of research at EUGENE INVESTMENT & SECURITIES, said, "Korea's economic future hinges on advanced industries, but regulation is not keeping up with the pace of technological development," adding, "Like the United States and China, where research and development (R&D) workforce management and autonomy are strong, Korea also needs regulatory innovation."
◇ Value-up policy must continue regardless of administrations to achieve the "Korea premium"
Alongside corporations' efforts to improve governance, opinions were raised that the value-up policy should continue steadily regardless of timing or administration.
Hwang Hyeon-yeong, a research fellow at the Korea Capital Market Institute, gave a presentation on "Outcomes and challenges of value-up and corporate governance improvement legislation." Hwang said, "The most important thing in a corporation's value-up disclosure is how it will fulfill its promise of shareholder returns," adding, "Some companies issue notices to convene their general meetings a month in advance, but many still disclose only two weeks prior, which needs improvement."
According to the exchange, the share of corporations that issue a notice to convene the general meeting four weeks in advance came to 38.9% this year. While this is an increase from last year's 28.7%, it still shows that most corporations are not announcing general meeting schedules with sufficient lead time.
In the panel discussion, participants argued that support should be increased to encourage small and midsize enterprises to participate in the value-up program.
Kim Jeong-yeong, an executive director at the Korea Exchange (KRX), said, "In Japan, 54% of listed corporations participate in value-up disclosures, but in our market only 15% of KOSPI-listed corporations are taking part," adding, "Small and midsize enterprises want to make value-up disclosures but cannot due to a lack of capacity."
There was also a view that the value-up index needs careful management. Hwang Chan-yeong, head of Macquarie Securities, said, "It is positive that the Korea Exchange (KRX) has shown a willingness to revise the value-up index in response to negative market reactions," adding, "For the value-up index to differentiate itself from the KOSPI200, it must first secure the reliability of the corporations included."