Deputy Minister Kim Yong-beom of Cheong Wa Dae's policy office, addressing views that the recently surging Korean stock market is a "bubble" that will soon fade, said it is "not that it has become expensive, but that it is finding its fair value." He also said the market is "not on a simple cyclical upswing tied to economic sensitivity, but on a 'order cycle' based on confirmed revenue." He noted that while doubts exist about the drivers of the rally, it cannot be seen as a temporary phenomenon given order books in key industries, the structure of manufacturing, and improvements in governance.
On the night of the 5th, the Deputy Minister posted an article on Facebook titled "Korea Inc, time for a reappraisal," suggesting that "rather than asking 'is this the peak now,' we should ask whether we have ever properly calculated the 'value of our bottlenecks.'"
Since the launch of the Lee Jae-myung administration, the Korean stock market grew rapidly to open the "KOSPI 6000" era, but plunged due to external factors such as the Middle East war, fueling "Korean stock market bubble theory" in the market. In this situation, the Cheong Wa Dae policy chief in charge of stock market policy posted views directly.
The Deputy Minister urged attention to the presence of domestic corporations across the supply chains of core industries such as artificial intelligence (AI) data centers, power, defense, and energy, citing major companies including Samsung Electronics and SK hynix (semiconductors), HD Hyundai Heavy Industries and Samsung Heavy Industries (shipbuilding), and Hanwha Aerospace (defense).
In particular, governance, rather than industrial competitiveness, was cited as the cause of the undervaluation of Korean stocks. He said, "Low dividends, passive shareholder returns, and opaque governance are the essence of the Korea discount," adding, "But recently, the market is seeing louder calls for increased dividends, share cancellations, and shareholder activism, and discussion of governance reform is gaining momentum." He viewed this change as a "re-rating," not a "bubble."
The prevailing view is that the semiconductor cycle led the rise in the domestic market. The Deputy Minister said, "That cannot be denied," but assessed, "Considering the restructuring of industrial structure and qualitative changes in the capital market, it is hard to dismiss this as a simple semiconductor cycle." He added, "Korea Inc is not getting expensive; it is peeling off, one by one, the yoke of undervaluation layered on for decades."