[Good Morning Market] Stock Market Revitalization Policies Restore Optimism... Uptrend Expected Through Year-End

President Lee Jae-myung's 100th Day in Office Press Conference
Reaffirming Commitment to Stock Market Normalization
Positive Market Outlook on Flexible Policy Stance

At a press conference marking his 100th day in office, President Lee Jae-myung once again emphasized the importance of revitalizing the stock market. Analysts have predicted that the domestic stock market will maintain its upward trend through the end of the year.

On the 11th, President Lee held a press conference at the Blue House State Guesthouse to commemorate his 100th day in office. During the event, President Lee expressed his willingness to gather opinions from investors and address market sentiment, including the possibility of easing the controversial major shareholder capital gains tax threshold. In addition to tax reform, he referenced institutional changes such as amendments to the Commercial Act, including the duty of loyalty for directors to shareholders, the cumulative voting system, and the planned mandatory retirement of treasury shares. He emphasized that the current administration considers the normalization and revitalization of the stock market as a key policy priority.

President Lee Jae-myung is answering questions at the 100-day inauguration press conference titled "100 Days for Recovery, Growth for the Future" held at the Blue House State Guesthouse on the 11th. Photo by Yonhap News Agency

Han Ji-young, a researcher at Kiwoom Securities, commented, "The historic rally in June (KOSPI’s 13% rise that month) was driven by the potential for a 'paradigm shift toward shareholder-centric policies,' and that possibility was again evident in this press conference."

Researcher Han added, "President Lee’s statement that the goal is to 'pressure not companies as a whole, but only certain unjust controlling shareholders' implies a message of shifting from a controlling shareholder-centered approach, which has been customary in the domestic stock market, to a focus on all shareholders, including minority investors."

Han believes that the government's efforts to boost expectations for stock market revitalization will help sustain the domestic market’s upward trend through the end of the year. He forecast that the KOSPI could reach the 3,550 level by year-end.

Han also noted, "There are events ahead, such as the supply-demand gap before the long national holiday in early October, that could temporarily weigh on the market. However, in the medium term, it is appropriate to maintain an upward outlook for the domestic stock market, especially as the momentum for artificial intelligence (AI) investment remains strong, which is expected to have a positive effect on the market." He added, "From the remainder of September through mid-October, the domestic market may face short-term volatility, but it is advisable to focus on a strategy of gradual accumulation centered on existing leading sectors such as shipbuilding, defense, and securities."

On September 12, the domestic stock market is expected to continue its upward momentum. This is due to President Lee’s remarks on stock market revitalization, as well as the three major New York stock indexes reaching record highs overnight.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,108, up 1.36% from the previous session. The S&P 500 rose 0.85% to 6,587.47, and the Nasdaq climbed 0.72% to 22,043.07. All three major indexes closed at all-time highs.

The U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) for August rose 2.9% year-on-year. While this increase was higher than July’s 2.7%, it was in line with market expectations, fueling hopes for a rate cut and prompting a positive response from the stock market. The market now sees a high likelihood that the Federal Reserve will cut its benchmark rate by 0.25 percentage points at the Federal Open Market Committee (FOMC) meeting scheduled for the 17th.

Researcher Han predicted, "The domestic stock market is expected to maintain a favorable trend, especially in the semiconductor sector, reflecting continued expectations for a rate cut by the Federal Reserve following a smooth CPI event, as well as optimism about the memory chip industry and the resulting rise in Micron’s stock price."