Lee Jae-myung promises to increase dividends and improve transparency in the capital market

President Lee Jae-myung recently highlighted the necessity of inducing South Korean companies listed on stock markets to increase dividend payouts to boost the national economy. Lee’s remark followed a meeting with the Korea Exchange’s representatives, where he expressed his concern that unlike other countries where dividends from stocks supplement living expenses, South Korean companies are hesitant when it comes to distributing dividends, leading to a lag in dividend payments compared to other nations like China.

Lee emphasized the significance of strengthening market supervision to address unfair trading practices such as insider trading, market manipulation, and market disruption. The President stated that transparency in capital markets remains a top priority following his recent inauguration. His policy involves implementing a ‘one strike, you’re out’ approach to punish wrongdoers engaging in unfair trading practices. This includes measures to recoup illicit profits through fines equivalent to the profits earned from such practices.

Moreover, Lee pledged during his presidential campaign to enhance market liquidity for stock investors and introduce mechanisms for better profit distribution to shareholders. He proposed that companies should fulfill their fiduciary responsibilities to both their companies and shareholders, promoting fairness and transparency in South Korea’s stock market.

The Seoul stock market reflected positive sentiment following Lee’s inauguration, with the Kospi hitting a three-year high. Over five consecutive trading days post-Lee’s induction, the market experienced growth, culminating in an almost 8% rise in the Kospi index. Foreign investor net inflows also saw a bolster in liquidity, including substantial net purchases on Wednesday, adding to the market’s upward trajectory.

President Lee underscored the role of the stock market as the core of a capitalist economy, stressing the need to eliminate unfairness and opacity in the market. To achieve this goal, Lee is working towards implementing reforms in the tax code and policies to enhance dividend payments, making stocks an appealing investment option comparable to real estate. Through increased dividends, companies stand to attract more capital, creating a positive economic cycle.

In conclusion, President Lee Jae-myung’s push for reforms in South Korea’s capital market to mandate dividends from listed companies can potentially invigorate the national economy by enhancing liquidity, boosting domestic consumption, and promoting fair financial practices. By focusing on increasing transparency and curtailing unfair trading practices, Lee aims to provide a conducive environment for investors while fortifying the foundation of South Korea’s stock market.