President Lee Jae-myung visited the New York Stock Exchange on the 25th (local time) and said the Korean stock market is undervalued, adding he would push a third amendment to the Commercial Act to improve it. He said the government would revamp the tax system, including separate taxation of dividends, to induce high payouts and, in principle, ban share buybacks for the purpose of defending management control.
Presiding over the Korea investment roadshow (IR) titled "Korea Investment Summit" at the New York Stock Exchange that day, Lee said, We amended the Commercial Act twice and will rationally change corporations' unreasonable decision-making structures, adding, We are also pursuing a third amendment to the Commercial Act. There is some resistance, but it is something that must be done. He also said, We will reform the tax system so that more dividends are paid, and we will prevent selfish abuses such as acquiring treasury shares to defend management control.
Referring to the recent record high for the KOSPI, Lee said, During the presidential race I said that if I were elected, that fact alone would push Korea's stock index above 3,000 points, and in reality, stocks are rising even more than that. He then cited the following as reasons for the undervaluation of the Korean stock market: ▲ geopolitical risks on the Korean Peninsula ▲ opaque corporate governance ▲ market unfairness ▲ political instability, adding, There were obstacles for foreign investors to invest in Korea, but I will change them all.
In particular, regarding unfair trading such as stock price manipulation, he said, We will respond so strictly it may seem harsh, so that no one can profit from illicit transactions. He continued, If you manipulate stock prices or distort the market, you will be ruined, and added, We will make a market where opaque, unfair trading is unthinkable. At the government level, he also promised a third amendment to the Commercial Act, measures to counter illicit transactions, and expansionary fiscal policy to invest in advanced industries such as the defense industry.
He also mentioned strengthening national defense to resolve geopolitical risks on the Korean Peninsula. Lee said, Korea's military power, excluding the U.S. Forces Korea, ranks fifth in the world based on its own capabilities. It is close to 1.5 times North Korea's annual gross domestic product (GDP), adding, We will sharply increase expenditure in the defense sector to strengthen independent defense capabilities. Calling Korea's defense industry overwhelming, he said, The instability from inter-Korean military confrontation and the resulting undervaluation will improve greatly going forward, so invest in the Korean market.