DP Vows KOSPI 10,000: "Dreams Do Come True"... Starting With Treasury Share Retirement "Without Exceptions"

Third Amendment to the Commercial Act to Be Passed Within This Month
Stewardship Code to Be Reviewed Before Shareholders' Meetings
"Capital Market Policies Will Remain Consistent"

The Democratic Party of Korea has concluded that the domestic stock market undervaluation issue, often referred to as the so-called "Korea Discount," is gradually being resolved. It announced that it will shift its goal to achieving a "Korea Premium" and open an era in which the KOSPI reaches 10,000 points. The party plans to continue boosting stock prices by pursuing consistent policies, including the third amendment to the Commercial Act.

At the plenary meeting of the Korea Premium K Capital Market Special Committee held at the National Assembly on the 3rd, Democratic Party leader Jeong Cheongrae said, "Surpassing KOSPI 5,000, reaching 6,000, 7,000, 8,000, 9,000, and even 10,000 is by no means just a dream. Dreams do come true," adding, "We are also upgrading the (Special Committee) name so that we can make a fresh start with a new name and renewed determination."

At the full meeting of the Democratic Party of Korea's Korea Premium K Capital Market Special Committee held at the National Assembly on the 3rd, the KOSPI and KOSDAQ indices, which recovered to the 5,000 level that day, are displayed behind Representative Jeong Cheongrae. Yonhap News

The K Capital Market Special Committee plans to usher in the Korea Premium era by prioritizing passage of the third amendment to the Commercial Act, which would make the retirement of treasury shares mandatory. Meeting with reporters immediately after the plenary session, Oh Gihyung, Chair of the K Capital Market Special Committee, said, "There is a consensus within the party that the third amendment to the Commercial Act should be passed within this month."

Regarding the proposed exceptions to the mandatory retirement of treasury shares, he drew a clear line, saying, "Once you start talking about exceptions, there is no end to it." Oh said, "I am not sure whether treasury shares acquired for a specific purpose can really be called 'involuntary.' In all cases, it is the company that makes the decision on its own," adding, "Moreover, the amendment itself allows any extension of the (holding) period or changes to the method, as long as approval is obtained at the general meeting of shareholders."

With the annual general meeting season coming up next month, the committee also decided to review the stewardship code, which provides guidelines for how institutional investors exercise their voting rights. Representative Kim Namgeun, a member of the K Capital Market Special Committee, said, "Because there has been no evaluation of activities under the stewardship code, the National Pension Service and the asset management companies entrusted with its assets are doing very little in terms of such activities," adding, "Our goal is to have compliance evaluations reflected in the assessments of asset management companies."

In addition, the five key tasks of the K Capital Market Special Committee are: (1) amending the Commercial Act to make the retirement of treasury shares mandatory, (2) preparing guidelines on directors' duty of loyalty to shareholders, (3) activating shareholder engagement activities by institutional and long-term investors, (4) revising the Capital Markets Act to protect shareholders from issues such as dual listings, and (5) preventing practices that suppress the stock prices of conglomerates. Oh stressed, "The capital market policies that the Democratic Party and the Lee Jaemyung administration are pursuing now are not unusual; they are policies that will be pursued consistently over the entire five-year term."