Presidential hopefuls seek support from retail investors

Former Democratic Party of Korea Chairman Lee Nak-yon, center, speaks during a roundtable at the Korea Financial Investment Association headquarters building on Yeouido in Seoul, Friday. Courtesy of Lee's office

By Park Jae-hyuk

Presidential hopefuls are making frequent visits to the financial district of Yeouido in Seoul, apparently seeking to win the hearts and minds of retail investors who have become an influential voting bloc since the stock market boom that started last year.

On Friday, former Democratic Party of Korea (DPK) Chairman Lee Nak-yon, one of the ruling party's presidential contenders, attended a roundtable held by DPK lawmaker Hong Sung-kook at the Korea Financial Investment Association headquarters building on Yeouido.

Lee became the first presidential hopeful to meet stock market experts as well as a representative of retail investors.

During discussions on ways to overcome the so-called “Korea discount” or the undervaluation of the local stock market due to risks perceived by foreign investors, Lee emphasized the need for regulations to meet global standards.

“I think it is a good idea to create a fund for younger people to make investments to raise a large sum of money to buy homes,” he said.

Former Prime Minister Chung Sye-kyun, left, speaks during a press conference at the Korea Exchange building on Yeouido in Seoul, June 28. Yonhap

Former Prime Minister Chung Sye-kyun, another ruling party presidential hopeful, visited the Korea Exchange (KRX) building on Yeouido, June 28, to announce his presidential election pledges related to capital markets.

He especially promised to revise the country's short-selling regulations, saying such measures will enable the benchmark KOSPI to reach 5,000 points.

“I will enable fair competition between institutional and retail investors,” he told reporters during a press conference.

Until the previous presidential election in 2017, candidates had paid little attention to the stock market and retail investors.

Although former President Lee Myung-bak visited Daewoo Securities' head office during his election campaign in 2007 and former President Park Geun-hye visited the KRX building on Yeouido during her election campaign in 2012, they merely voiced their hopes for a stock market rally.

As the number of retail investors here reached almost 10 million last year, however, presidential hopefuls from both the ruling and opposition parties, including Gyeonggi Province Governor Lee Jae-myung, People's Party Chairman Ahn Cheol-soo and People Power Party lawmaker Hong Joon-pyo, leveled criticism at the current short-selling system in order to win the support of such investors.

In the wake of this trend, the Korea Stockholders Alliance, which represents the rights of retail investors, began to flex its muscle, saying it is planning to meet presidential candidates to ask them to reform short-selling regulations.

Korea banned the short selling of listed stocks to cope with a stock market rout triggered by the COVID-19 pandemic. But the ban was lifted earlier this year. Retail investors have criticized short selling for fueling price declines when stock markets fall.