Seoul: President Lee Jae Myung on Wednesday urged the country's capital markets to view the deteriorating economic conditions, exacerbated by the ongoing conflict in the Middle East, as a chance to implement necessary reforms. Speaking at a meeting with investors and financial authorities, Lee emphasized the importance of reform to stabilize South Korea's capital markets amid the increased volatility prompted by the escalating tensions.
According to Yonhap News Agency, Lee highlighted the significant impact of the Middle East conflict on domestic stock prices, which have experienced a sharp decline and heightened fluctuations. He asserted that such crises offer an opportunity for essential reforms, which are crucial for paving the way for a fresh start. Lee also addressed the longstanding undervaluation of South Korea's stock market, attributing it to exaggerated geopolitical risks and security uncertainties on the Korean Peninsula.
Lee pointed out that the perceived threats around the Korean Peninsula often lead to concerns about the possibility of another war, which he claims are overstated. He expressed optimism that South Korea could transform its economic image from a 'Korea discount' to a 'Korea premium' through strategic actions.
He identified four main factors contributing to the undervaluation of South Korean assets: weak corporate governance, unfair market practices like price manipulation, geopolitical risks, and policy unpredictability. The meeting, aimed at discussing ways to reform and stabilize the capital markets, was attended by key figures including Financial Services Commission Chairman Lee Eog-won, Financial Supervisory Service Governor Lee Chan-jin, along with investors and company representatives from the KOSDAQ and KONEX indices.