Foreigners are returning to the stock market, helping to push the benchmark Kospi Index into a bull market on Lee’s first day in office. The early euphoria suggests investors are confident that Lee will accelerate efforts to boost shareholder returns — reminiscent of a similar drive that unleashed a stock rally in Japan — and succeed in the passage of a commercial law revision aimed at improving corporate governance.
After years of frustration with South Korea’s underperforming stock market, investors are growing more optimistic that the new president’s push for shareholder-friendly policies will finally deliver stronger returns.
Global money managers, including Aberdeen Investments, Pictet Wealth Management, and Franklin Templeton, have recently added positions or upgraded their outlook on local stocks. They are encouraged by newly-elected Lee Jae-myung’s vows to boost corporate governance and nearly double the market’s return, after months of political chaos in the nation triggered by his predecessor’s short-lived martial law imposition.
