The government appears poised to leave the stock market unattended at least through this year. As a U.S.-driven artificial intelligence (AI) bubble theory spread at home and shook the market, the ruling party and the government immediately stepped in as a "relief pitcher."
President Lee Jae-myung on the 11th ordered measures to expand tax benefits for investors who hold domestic stocks for the long term. This came immediately after the ruling party and the government on the 9th decided to sharply lower the top rate for separate taxation of dividends from the existing 35% to 25% to boost the market, with the president calling for additional steps. It was right after the KOSPI, which had been hitting a record high day after day, wobbled with a sharp correction.
A market expert I met recently said, "I don't know about next year, but this year the government does not appear likely to tolerate a decline in the KOSPI," adding, "At least until year-end, there seems to be no reason to pull money out of stock accounts." The point was that even if external factors shake the market, policy will serve as a breakwater to defend against a fall in the index.
The Lee Jae-myung administration pledged right after its launch to achieve "KOSPI 5000." While making a stock price index, which reflects the value of listed corporations, a policy goal may feel like putting the cart before the horse, the policy objective is clear and the resolve to achieve it is firm. All-around market-boosting measures were rolled out, and their effect was confirmed through a rising KOSPI.
The government is expected to pivot its policy direction in its second year in office by executing artificial intelligence (AI) funds. The government announced a plan to create a 150 trillion won AI innovation fund to concentrate investments in AI infrastructure-related industries such as semiconductors, cloud, and data centers.
Lee Ung-chan, an iM Securities researcher, said, "Policy changes have clearly had a positive impact on the market, and improved investor sentiment will also limit downside in the index," forecasting that next year the KOSPI could rise to 4,500 and, if the semiconductor cycle strengthens further, achieving 5,000 points on the KOSPI is also possible.