"Entry into the Global Sovereign Bond Index Opens a Path to Enhance the Breadth and Depth of the Capital Market"
President Yoon Suk-yeol is speaking at the Cabinet meeting held on the 15th at the Yongsan Presidential Office Building in Seoul. [Image source=Yonhap News]
President Yoon Suk-yeol stated on the 15th, "Inclusion of our country in the World Government Bond Index (WGBI), eradication of illegal short selling, tax reform, and corporate value-up initiatives will resolve the Korea discount, elevate the status of our capital market, and attract more investment." He particularly emphasized that the abolition of the financial investment income tax is necessary for the effects of WGBI inclusion to spread to the stock market, and urged the ruling and opposition parties to unite their efforts for this cause.
At the Cabinet meeting held at the Yongsan Presidential Office on the same day, President Yoon said, "On October 9th, our country's inclusion in the World Government Bond Index was decided, proudly placing our name on a global government bond investment index worth 2.5 trillion dollars, opening a channel that will add breadth and depth to our capital market."
Evaluating that "this is international recognition that the policies our government has pursued were on the right track," President Yoon projected that approximately 75 trillion won of global investment funds will flow in due to this WGBI inclusion. He emphasized, "With global government bond demand as a foundation, interest rates will stabilize, reducing funding costs for the government and corporations, facilitating foreign exchange liquidity supply, and stabilizing the value of the Korean won."
He continued, "Along with this good news in the government bond market, our stock market, the 'flower of the capital market,' is also on the verge of change," explaining, "On September 26th, the amendment to the Capital Market Act, which includes improvements to the short selling system, passed the National Assembly and will be promulgated today through the Cabinet meeting." President Yoon expressed hope, saying, "When the law is enforced at the end of March next year, illegal short selling will be fully inspected through the computerized system. The 'tilted playing field' between institutions and individual investors will be resolved, and penalties and sanctions against illegal short selling and unfair trading will be significantly strengthened."
He also promised to further accelerate the ‘corporate value-up’ policy to revitalize the capital market. President Yoon said, "We will provide various incentives to shareholder-friendly companies that increase dividends and retire treasury stocks," adding, "We will surely create a virtuous cycle where companies increase their value, and the invested citizens enjoy greater profits and opportunities for asset formation."
Furthermore, he added, "I hope the ruling and opposition parties will work together to eliminate market instability factors through the abolition of the financial investment income tax and to develop our capital market."
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