On the 18th, President Lee Jae-myung said about the Korean stock market repeatedly surging and falling rapidly due to the Middle East situation, "From the 2,500–2,600 level last year, it really kept rising without any real correction to the mid-6,000s, and to be honest, I felt very uneasy," adding, "Perhaps we are going through a process of consolidation triggered by a single event." As views grew that the Korean stock market, which soared in a short period after the launch of the Lee Jae-myung administration, is a "bubble" that will soon disappear, the president directly called it a "correction process."
Presiding over a roundtable at Cheong Wa Dae on "stabilizing and normalizing the capital market" that day, Lee said, "Recently, because of the war, stock prices plunged and have been fluctuating, but everything has two sides." He added, "We must overcome national crises well, but internally, this is precisely when resolving the necessary reform measures is the way to make a fresh start."
In particular, he said the "geopolitical risk," cited as a cause of the Korea discount (undervaluation of the Korean stock market), has been exploited politically. Lee said, "The geopolitical risk arising from the division of the Korean Peninsula has in fact been greatly exaggerated," adding, "The political sphere unjustly exploited it, amplifying unnecessary tension and anxiety. With just a bit of effort, this issue can be fully resolved."
He went on, "As an extreme example, war ultimately entails tremendous destruction and killing even in victory, and in the end both sides suffer damage. In most cases, no one wants it," adding, "The Republic of Korea's defense capability is world-class. National defense expenditure exceeds North Korea's by 1.4 times, and our conventional military strength is assessed as fifth in the world." He also said the competitiveness of the domestic defense industry is high, adding, "Objectively, (geopolitical risk) is hardly an issue."
◇ "Why do I get paid the day after tomorrow for stock sold today?" "Pursuing a shift to T+1"
Pointing out problems with margin transactions, he also said adjustments are needed. Lee said he received a related message from Park Yong-jin, vice chair of the Regulatory Reform Commitee, saying, "Why is it that when you sell stock today, you get the money the day after tomorrow? Back in the day I also thought, why does it have to be that way?" He added, "It probably has to do with margin transactions, and I wonder if it is related to being able to buy without cash for two days," and said, "If necessary, how about reviewing this as one of the agenda items for adjustment?"
In the domestic stock market, payment is settled on "T+2 from the trading day (T)." That means it takes two days to receive the actual money after selling stock. The margin transaction Lee mentioned is a system in which an investor pays a deposit corresponding to a certain percentage of the purchase amount, and buys the stock on credit for the remainder. In other words, the balance must be repaid within two days of the transaction date.
In response, Chung Eun-bo, chair of the Korea Exchange (KRX), who attended the roundtable, said, "We are pursuing a change to T+1 starting in Oct. 2027," adding, "We are currently working hard to shorten the settlement cycle to keep pace with Europe." He also said, "If transactions are conducted using Blockchain technology, the clearing and settlement process will disappear and it will shift to immediate payment," adding, "We will closely monitor international trends and prepare so that clearing and settlement can be carried out preemptively."