[Market Focus] Securities Stocks Rally on Hopes of Maintaining 5 Billion Won Major Shareholder Threshold

Securities stocks are showing strength amid expectations that the major shareholder threshold for capital gains tax on stock transfers will remain at the current "holdings of 5 billion won or more per stock."

As of 10:35 a.m. on August 12, Bukook Securities is trading at 56,300 won, up 5,000 won (9.75%) from the previous trading day.

Securities stocks across the board are rising, including Kiwoom Securities (5.9%), Shin Young Securities (5.35%), Daishin Securities (4.42%), Korea Financial Group (4.27%), and Mirae Asset Securities (4.08%).

The strength in securities stocks appears to be due to the increased likelihood that the major shareholder threshold, which was set to be tightened under the government's tax reform plan, will remain unchanged.

The previous day, the Democratic Party of Korea announced that it had conveyed to the government its opinion that the major shareholder threshold for capital gains tax on stock transfers should remain at the current "holdings of 5 billion won or more per stock."

Han Jeongae, the Democratic Party's Policy Committee Chair, explained that during the high-level party-government meeting held the previous day, she told the government, "We expressed our opinion that it would be better not to touch the major shareholder threshold for capital gains tax on stock trading profits."

Last month, the government announced in its proposed tax law revisions for next year that it would lower the major shareholder threshold for capital gains tax from the current 5 billion won to 1 billion won.

Afterwards, concerns were raised among Democratic Party lawmakers, including Lee Soyoung, that changing the major shareholder threshold could undermine President Lee Jaemyung's national goal of achieving a KOSPI index of 5,000.