KOSPI Surpasses 5,000... "Even Overseas Retail Investors May Now Consider Investing in the Domestic Market"

"A Market Must Have Growth Potential"

As the KOSPI index surpassed the 5000 mark for the first time in history, Oh Ki-hyung, a lawmaker from the Democratic Party of Korea, commented, "At this point, even retail investors investing in overseas markets may be wondering whether investing in the domestic market is a rational choice."

Oh, who serves as the chairman of the KOSPI 5000 Special Committee, made these remarks on January 23 during an appearance on MBC Radio’s "Kim Jongbae’s Focus." He said, "Retail investors investing abroad are likely considering whether it would be reasonable to diversify their portfolios between Korea and the United States." He added, "The very fact that we are now in a situation where such considerations are possible is itself an achievement. If the Korean capital market continues to resolve its discount (undervaluation), I believe that retail investors investing overseas will naturally return."

He continued, "In the past, there was cynicism reflected in expressions such as 'escaping the Korean stock market is a sign of intelligence' or 'Boxpi.' However, after the first revision of the Commercial Act, there seems to be growing curiosity about whether the Korean market is changing." He added, "Since last September, there has been growing anticipation that the Korean market will make consistent efforts to resolve its undervaluation, and since then, performance has been reflected, bringing us to this point."

When asked about ways to encourage the return of retail investors investing overseas, Oh replied, "I don’t think a single policy or two can provide the answer. Fundamentally, if the Korean market itself is a market with growth potential, transparency, and profitability, I believe investors will naturally return."

On the 22nd, when the KOSPI surpassed the dream index of 5000, employees were cheering and applauding in the dealing room of Hana Bank in Jung-gu, Seoul. Photo by Jo Yongjun

He also said, "I understand that right after the presidential election on June 3 last year, the index was around 2,700. Until September last year, policy was important. There was little talk about changes in fundamentals, but since October last year, semiconductor earnings started to appear. After that, performance significantly drove the market upward, and policy supported this phase."

Regarding the pressure he felt as the KOSPI index surpassed the 5000 mark, Oh said, "The biggest issue in the market seems to be whether this is a bubble or not. I believed that the index could not reach 5000 without strong performance, but with semiconductor earnings far exceeding expectations, the market is heating up." He added, "There are concerns about whether semiconductors will be affected by the economic cycle in the current situation, and questions about how to respond to this. Ultimately, we have no choice but to improve the structure of our capital market."