Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Gov't to roll out measures to boost lagging Kosdaq
An electronic trading board at Hana Bank headquarters in Seoul, Monday, shows the benchmark KOSPI trading at 3,976.62 points and the secondary bourse Kosdaq at 923.94 points during intraday trading. The KOSPI fell 0.16 percent to close at 3,920.37 points, while the Kosdaq rose 1.06 percent to finish at 922.38 points. Yonhap
By Yi Whan-woo
The government plans to introduce tailored measures to boost the secondary bourse Kosdaq, as its pace of growth remains less than half of the benchmark KOSPI despite a recent market rally, industry officials said Monday.
They said the Financial Services Commission (FSC) is likely to expand tax deductions on capital gains and offer full exemptions on transaction taxes.
The measures may also lower the barriers for promising companies to list while tightening the criteria for delisting underperforming firms.
“The FSC may unveil the measures, possibly within this week,” an industry official said.
The plan comes as the Kosdaq has grown 22.9 percent compared with the KOSPI’s 54 percent since June when President Lee Jae Myung took office.
Correspondingly, the KOSPI, after remaining in the 2,000-point range for years, surpassed 3,000 points in June and then 4,000 points in October.
“The contrast is certainly concerning for regulators,” another official said, adding that the president has prioritized shifting funds from real estate into the stock market, fueling a market boom.
Individual investors and major institutional investors, such as pension funds, are the key targets of the plan.
To this end, consultations are underway to expand the maximum on investments eligible for a 10 percent tax deduction on capital gains, from the current 30 million won ($20,000) to 50 million won.
For institutional investors, the FSC considers granting exemptions from securities transaction taxes for pension funds and foreign institutional investors.
The measure is especially expected to raise the National Pension Service’s (NPS) share of the Kosdaq’s market capitalization from the current 3 percent to around 5 percent, amid the NPS’ growing asset pool valued at 1,400 trillion won.
An industry official said the plan may help drawing large firms into the Kosdaq, which is heavily dominated by medium-sized companies and startups.