Ruling party presidential candidate says Korean stocks are undervalued

Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea (DPK), speaks at a campaign event at the party's headquarters in Seoul, Dec. 24. Yonhap

Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea (DPK), said Saturday that South Korean stocks were undervalued and he believed the KOSPI could go up to the 5,000-point range.

"The KOSPI reaching 5,000 points is not difficult," Lee said on 3Pro TV, a YouTube channel devoted to the economy. The KOSPI closed at 3,012.43, Friday.

Asked why he thinks local stocks are undervalued, Lee pointed to a lack of transparency in the market.

"Since the country's stock manipulation crackdown is very low and punishment is too weak ... people do not trust the market," Lee said.

The former Gyeonggi Province governor suggested the National Pension Service (NPS), South Korea's top institutional investor, increase its portion of local investments. He also called for "rationalizing" the short-selling system rather than scrapping it.

When it comes to investing in virtual assets, Lee proposed making "authorized" virtual assets that offer real or underlying value as collateral.

Lee said the country's housing market is at its peak and soaring home prices were caused by policy mistakes.

"For example, if the market feels that home supply is insufficient, we need to take action to increase supply, but there seems to be an aspect of denying the market's request," he said. "Suppressing prices actually can bring about adverse effects." (Yonhap)