Korea Exchange chief eyes new high for Kospi as reforms enhance value, clean up market

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Korea Exchange chief eyes new high for Kospi as reforms enhance value, clean up market

Published: 02 Jul. 2025, 16:20 Updated: 02 Jul. 2025, 18:18

Audio report: written by reporters, read by AI

Jeong Eun-bo, chairman of the Korea Exchange, speaks in an interview with the JoongAng Ilbo at the exchange’s Seoul office in Yeouido, western Seoul, on the afternoon of June 30. [KIM KYOUNG-ROK]

Korea's stock market, which had been sluggish and stuck in a limited trading range, has shown a strong performance this year, outpacing major developed markets.

Jeong Eun-bo, who has led the Korea Exchange since last year, has experienced both the highs and lows of the market. From the previous administration's "value-up project" to the current government's vision of a "Kospi 5000," he is tasked with the core mission of boosting the stock market.

In an interview at the Korea Exchange in Yeouido on June 30, Jeong said his goal is for the Kospi to surpass its previous all-time high of 3,305.21 points in July 2021 within the year, a goal he believes is possible.

The following are excerpts from the interview, edited for length and clarity.

Q. Why was Korea’s stock market isolated last year?

A. First, it’s an issue of industrial competitiveness. The question is whether Korea’s traditional manufacturing-based economy can continue to generate growth momentum.

Second, there is excessive information asymmetry between companies and investors in the stock market. I believe this lack of investor protection has led to a valuation discount.

Why has the situation improved this year?

The government has highlighted resolving stock undervaluation, and with the launch of the new administration, there is growing expectation that investor protection will be properly implemented. Also, with stock prices dropping so much over the past two years, valuation appeal has returned.

How high can the Kospi go?

Our goal is to break through the 3,300 level — the previous high on a closing basis recorded on July 6, 2021 — by the end of this year. I believe it’s achievable just by reducing information asymmetry and implementing investor protection policies to eliminate the so-called Korea discount.

However, to reach the administration’s stated goal of 5,000 or higher, concerns about industrial competitiveness must be addressed. Private companies must increase investment and create new revenue models to make that possible.

Legal reforms for investor protection, such as amending the Commercial Act, are being discussed. What’s your view on the reform plans?

Whether it’s the Commercial Act or the Capital Markets Act, I think the target should be listed companies, not all businesses. There’s no need for the state to intervene in most unlisted companies that don’t have minority shareholders. The cumulative voting system should be implemented, but protection of management rights must also be discussed.

In the past, it took 100 years to become a global company, but now it can happen in just 10. Protecting management rights is essential for Korean companies to raise capital quickly and compete globally.

Jeong Eun-bo, chairman of the Korea Exchange, speaks in an interview with the JoongAng Ilbo at the exchange’s Seoul office in Yeouido, western Seoul, on the afternoon of June 30. [KIM KYOUNG-ROK]

What are the Korea Exchange’s key priorities?

We’re now focusing on structural reform of the market. There are too many so-called zombie companies — firms that failed to commercialize and have become hotbeds of unfair trading practices like stock price manipulation. We’re reviewing ways to swiftly delist these companies. Korea’s market capitalization is just one-thirtieth that of the United States, yet we have half as many listed companies. That’s too many.

Some say it’s too easy for new firms to get listed. Your response?

Korea needs to keep growing, so we must keep the door open for new companies to go public. To avoid Japan’s “lost 20 years,” we must support high-value-added industries like defense, liquefied natural gas and nuclear power instead of traditional manufacturing like steel.

We also need to help advanced tech firms like AI and humanoid robotics attract investment. That’s why we’re actively pushing for a special listing program for AI companies — an “AI Fast-Track Listing” system. At the same time, we’ll also implement a system to promptly delist companies that fail to commercialize. The framework for these measures should be in place by the end of the year.

Exchanges are facing growing competition, with the New York Stock Exchange and Nasdaq introducing 24-hour trading next year. How will Korea respond?

If U.S. exchanges trade 24 hours a day, Korean investors will be able to trade U.S. stocks during the day. This marks the start of global competition among exchanges. We also have no choice but to gradually extend trading hours and ultimately move to 24-hour trading.

Additionally, to develop new growth drivers, Korea’s capital market must prepare quickly for offerings like virtual asset exchange-traded funds and Security Token Offerings.

What is your outlook on the growth potential of Korea's capital market?

I believe our growth potential is higher than any other market. As Korea’s per capita GDP has risen to $36,000, the volume of household assets has grown.

But with the aging population, real estate — aside from certain regions — is unlikely to generate high returns. As household wealth shifts from real estate to financial assets, the share of financial assets will surpass that of real estate, and the capital market will naturally expand.

The key is to foster new industries so that these assets remain in the domestic market.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY NAM YOON-SEO, KIM KYOUNG-ROK [[email protected]]