President Lee Hosts Investor Briefing at New York Stock Exchange
"Improving Inter-Korean Military Tensions, Expanding Government Role in Industry"
Pledges to Address Foreign Investor Concerns Over Offshore FX Transactions
On the 25th (local time), President Lee Jae-myung met with major Wall Street investors in the United States and pledged to definitively resolve the geopolitical risks on the Korean Peninsula and to swiftly address the issues in the offshore foreign exchange market for Korea's inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index. He also stated that, following the first and second rounds of amendments to the Commercial Act, he would proceed with a third round focused on the cancellation of treasury shares, and that all necessary systems would be introduced without exception to rapidly improve Korea's investment environment.
After conducting the opening bell ceremony at the New York Stock Exchange (NYSE) that morning, President Lee participated in the "Korea Economic Briefing (IR) Investment Summit" and remarked, "Although this is a period of chaos as a new economic order is being formed, I believe it also presents new opportunities. The U.S. market is reaching all-time highs, and the Korean market is also hitting record highs, but it remains undervalued due to several factors," he said.
Lee: "All necessary systems will be introduced without exception"
President Lee Jae-myung waves his hand after pressing the button to open the market at the New York Stock Exchange in the United States on the 25th (local time). Photo by Yonhap News
President Lee publicly pointed out that the price-to-book ratio (PBR) of the Korean stock market is below 1, and the price-to-earnings ratio (PER) is lower than those of underdeveloped countries. He identified the following causes: the geopolitical risk on the Korean Peninsula, the unfairness and lack of transparency in corporate management, the unfairness of the market, and political instability. He also acknowledged that foreign investors have faced obstacles when investing in the Korean market.
He emphasized that policies to resolve this undervaluation would be pursued continuously going forward. First, he warned that market-disrupting activities such as stock price manipulation would be severely punished. Introducing his own words, "If you manipulate stock prices, you will be ruined," he asserted, "The joint capital market investigation team is working hard. We will create a market where opaque and unfair transactions are not even imaginable, let alone attempted."
He also expressed his determination to push ahead with the third round of amendments to the Commercial Act. He explained that this is to rationalize the unreasonable decision-making structures within companies. After briefly summarizing the contents of the first and second rounds of amendments, President Lee stated, "We are pursuing the third round of amendments to the Commercial Act. There is resistance, but it will be implemented in practice," he said. "Through tax system reforms, we will encourage more dividends, and by introducing measures to prevent the selfish abuse of treasury shares for management control, we will introduce all necessary systems without exception."
Lee: "Improving inter-Korean military stability, expanding government role in industrial policy"
He also pledged to definitively improve Korea's geopolitical risk. He explained that, even without the presence of U.S. Forces Korea, the country possesses the world's fifth-largest military power and its annual defense budget is 1.4 times North Korea's gross domestic product (GDP), thus dispelling security concerns. President Lee stated, "The instability caused by inter-Korean military confrontation will be greatly improved," adding, "We plan to significantly increase our own defense spending to strengthen our independent defense capabilities."
Regarding industrial and economic policy, he said, "We plan to dramatically expand the government's role through expansionary fiscal policy," and predicted, "We are clearly presenting the direction in which the Korean economy and society will move, and it will be realized in practice."
On the issue of Korea's exclusion from the Morgan Stanley index, he commented, "It is very regrettable." President Lee said, "It is because our preparations are insufficient, and I have heard that the key issue is the offshore foreign exchange market," adding, "We intend to resolve this very quickly." After confirming the presence of a Morgan Stanley representative, President Lee said, "I especially wanted to meet you," and added, "I look forward to working with you."
First Investment Briefing by a Korean President at the New York Stock Exchange
President Lee Jae-myung is speaking at the Korea Economic Briefing Investment Summit held at the New York Stock Exchange in the United States on the 25th (local time). Photo by Yonhap News
This is the first time a Korean president has held an investment briefing at the New York Stock Exchange. It is the first visit by a Korean president to the exchange in about 17 years, since former President Lee Myung-bak in April 2008. Counting all past presidents, only three have visited: former President Kim Dae-jung in June 1998, former President Roh Moo-hyun in May 2003, and now President Lee Jae-myung. However, former President Moon Jae-in held a luncheon meeting with financial and business leaders at a hotel in New York in September 2017.
This event was attended by 20 top executives from major global financial institutions on Wall Street. Among them were Jane Fraser, Chief Executive Officer of Citigroup since 2021; Emmanuel Roman, CEO of PIMCO, the world's largest bond investment firm; Mary Erdoes, CEO of JPMorgan; Marc Nachmann, President of Goldman Sachs; and Joseph Bae, CEO of KKR.
From the Korean government, Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol, Financial Services Commission Chairman Lee Eogwon, Financial Supervisory Service Governor Lee Chanjin, and Korea Exchange Chairman Jung Eunbo were present. CEOs from major domestic financial firms also attended, including Jin Okdong, Chairman of Shinhan Financial Group; Ham Youngjoo, Chairman of Hana Financial Group; and Kim Namgoo, Chairman of Korea Investment Holdings.
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