Financial market

Lee and Yoon promise to modernize South Korea’s financial market

SEOUL, 03 Jan. (Yonhap) – The main presidential candidates on Monday pledged to dispel the undervaluation of local stocks as they promoted their election pledges to improve the country’s financial market.

Lee Jae-myung of the ruling Democratic Party (DP) and Yoon Suk-yeol of the main opposition People Power Party (PPP) presented their plans to investors as they attended a New Year’s opening ceremony of the Korea Stock Exchange in Seoul.

Lee said he would try to keep the market transparent, so that some 10 million individual investors in the country do not feel betrayed or left out.

“It is an undeniable fact that our capital market is very ‘tight’,” Lee said at the ceremony. “Getting rid of the cause (of the haircut) and normalizing our capital market are ways to increase the wealth of the country and also to provide investment opportunities for our people.”

To overcome the so-called Korean haircut, referring to the undervaluation of local stocks, Lee called for massive investments and strong economic stimulus policies for the country to generate new growth opportunities.

“Turning a crisis point into a rebound opportunity is the most important job of government and is the sure way to develop the capital market,” he said.

Yoon said he believed the country’s existing political and economic systems were also behind the Korean haircut.

“We need to continually improve transparency in the governance structure of local businesses and the issues of low credibility in accounting,” Yoon said. “We also need to ensure that people’s retirement savings are invested in the capital market and reap the benefits by fixing the tax and related systems.”

Yoon added that the country should try to create a healthy market environment where foreigners can invest safely for a long time and the rights of individual small investors are not ignored.

He called for stiff penalties for stock manipulation and warned of anti-business sentiment.

“We are recently seeing a rise in populism and regulatory movements that hamper the business activities of companies,” he said.