KOSPI Jumps on Hope of Market Reforms by New President

Platform companies Naver and Kakao surged 8.54% and 8.58%, respectively, their sharpest gains in nearly two years, on hopes that Yoon will help remove regulatory hurdles for operators

 

South Korean shares posted their biggest jump in more than a year on Thursday, buoyed by hopes of investor-friendly market reforms by President-elect Yoon Suk-yeol, while oil paring steep gains also lifted sentiment.

The benchmark KOSPI ended up 57.92 points, or 2.21%, at 2,680.32, its sharpest rise since February 25, 2021, cheering former top prosecutor Yoon’s win that signalled a turn for capital market deregulation for Asia’s fourth-largest economy.

One of Yoon’s key pledges is to scrap capital gains tax on stocks and ensure retail investors could make profits.

He has also pledged to improve rules on short-selling of stocks and protect individual investors from spin-off initial public offerings.

“Yoon’s financial market-related pledges can be summarised as revitalisation of the capital market… such moves would lift the attractiveness of shares and draw long-term investors,” Choi Yoo-june, an analyst at Shinhan Investment Corp, said.

Although Yoon’s pledges are focused on protecting retail investors, institutions also see themselves eventually benefitting.

“Anyway [those moves] will be a ‘thank you’ to institutional investors. These will add boost to the markets… and lead to stronger inflow of overseas passive and active funds,” a Seoul-based fund manager, who did not want to be named, said.

 

Platform Companies Shoot Up

Sentiment was also helped by a regional rebound, as the end of a commodity price rally led to speculation that weeks of market gyrations may have priced in the Russia-Ukraine conflict’s economic impact.

Heavyweights Samsung Electronics and SK Hynix led gains, jumping 2.45% and 1.69%, respectively.

Platform companies Naver and Kakao also surged 8.54% and 8.58%, respectively, both marking their sharpest gains in nearly two years, helped by hopes of Yoon potentially finding ways to remove regulatory hurdles for platform operators.

On the main board, institutional investors gobbled up 765.4 billion won ($622.58 million) worth of shares, while foreigners sold a net 426.4 billion won worth shares.

The won ended at 1,228.3 per dollar on the onshore settlement platform KRW=KFTC, 0.71% higher than its previous close.

 

• Reuters with additional editing by Jim Pollard

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.