Simultaneous sags in Kospi, Yoon's ratings
The Kopsi dropped by 8.7 percent between May 10, when Yoon was sworn in as president, and July 20, dropping from 2,596.56 points to 2,386.85 points, according to the Korea Exchange.
Approval ratings for Yoon have fallen in the same period, dropping from 52 percent on the week when he was inaugurated, according to Gallup Korea, to 32 percent last week. Other polls have showed similar results.
At the very least, say analysts, people who voted for Yoon because of his stock market policies may feel their approval sagging.
“The domestic stock market rose sharply from 2020, and many new investors who came in at that time were people in their 20s and 30s investing for the first time,” said Lee Jong-woo, former director of the research center of IBK Securities.
“So when the presidential election came around, these people paid attention to the candidates’ policy pledges regarding the stock market,” he said. “Some who voted for Yoon because of his policies may now blame the his administration for the dropping prices.”
During the election, Yoon promised to invigorate the equity market so that one out of every five Koreans will be investing in local stocks and to eradicate illegal short selling.
“At the time, economists in the campaign said illegal short selling would be difficult to eradicate,” said a market analyst who spoke on the condition of anonymity. “However, I understand that the pledge was made because there was a general agreement within the campaign that they had better put forward the pledge to get the votes.”
On its pledge to eliminate the capital gains tax, the Yoon government seems to be working on a compromise measure.
The capital gains tax used to apply to shareholders owning more than 1 billion won of a single stock.
The administration was reported in May to be thinking of raising the threshold, so only shareholders owning more than 10 billion won of a single stock need to pay the tax.
“The measure is a compromise, so that doesn’t look good,” said a market analyst. “It’s not really a smart move to win the hearts and minds of young voters who are actively investing.”
Mr. Kim, a 44-year-old office worker in Seoul who says he voted for Yoon, finds himself blaming the government every time he checks the stock market.
“I deleted the app on my phone to check stock prices, because I was so angry all the time,” he said. "It wasn’t doing my health any good."
Kim’s investment in Kospi shares has dropped in value by 40 percent as of this month.
“I understand that every individual makes their own choice in investing, but I still had high expectations for the Yoon government because of its economic policies,” Kim said. “I regret voting for Yoon.”
BY SHIM SAE-ROM, ESTHER CHUNG [chung.juhee@joongang.co.kr]
with the Korea JoongAng Daily
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