Lee Says Stock-Market Polarization Is Deepening South Korea’s Wealth Divide
Summary
- President Lee Jae-myung said stock-market polarization is causing a severe wealth divide, calling it “a problem” and “a concern.”
- Lee said the stock index is rising on gains in a few names such as Samsung Electronics and SK Hynix, while the gap with the Kosdaq index, which remains below 1,000, has widened.
- As he enters the second year of his term, policy is set to place more weight on easing polarization, and Lee said his second cabinet should be reorganized with people capable of carrying out new initiatives.
Forecast Trend Report by Period
President rejects People Power Party criticism over Kospi “self-congratulation”
“Can you make up something that never happened?” Lee says
President Lee Jae-myung said on June 19 that polarization in the stock market is driving a serious wealth divide, calling it “a problem” and “a concern.” His remarks pointed to a pattern in which investors holding a few sharply rising stocks post outsized gains while lower-income households with no stock holdings are left behind.
Lee made the comments at a briefing at Chunchu Hall in the presidential office on the results of his trip to Europe. He said the government is making extensive efforts to ease polarization. Broad-based gains would be better than a headline rise in stock indexes, he said, but that has proved difficult. Lee appeared to be lamenting a market in which a handful of stocks, including Samsung Electronics Co. and SK Hynix Inc., are driving the benchmark rather than a broad rally in the main board. The gap with the Kosdaq index, which remains below 1,000, has also widened.
The comments came as Lee pushed back against Kweon Seong-dong, floor leader of the People Power Party, who said this was no time to be intoxicated by a Kospi target of 9,000 and indulge in self-congratulation. Kweon also said concerns are growing over polarization across sectors. Lee replied that he has been extremely cautious when talking about the stock market and has never made such remarks. “Can you make up something that never happened and then tell me not to be arrogant?” he said.
As Lee enters the second year of his term, attention is turning to whether policy will place greater emphasis on easing polarization. On a possible reshuffle of his second cabinet, Lee said the next phase would be a period of properly carrying out newly planned work. He added that the cabinet may need to be reorganized with people suited to that task.
Kim Hyeong-gyu, Hankyung reporter khk@hankyung.com
Lee Esther, Hankyung reporter esther@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
