On Tuesday, South Korea’s Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul stated that the government’s initiatives will create momentum for the Korean capital market to earn its rightful Korea Premium.
He made these remarks during an investment roadshow for global investors in New York City, emphasizing that the government is actively pursuing policies aimed at inclusion in the MSCI developed markets index.
This marks the first time Deputy Prime Minister Koo has personally led an investment briefing attended by senior executives from major global financial institutions in New York.
The event drew representatives from top asset management firms, including BlackRock, JP Morgan, Morgan Stanley, State Street, and Northern Trust. The government also conducted a separate briefing for Vanguard, the second-largest asset manager, via video conference.
This effort successfully promoted the Korean economy to all five of the world’s leading asset management firms. About 20 senior executives attended, including those from top global asset managers and major investment banks like Citigroup and Goldman Sachs Group, Inc.
During the briefing, Deputy Prime Minister Koo highlighted the Korea Premium and outlined the government’s commitment to capital market reforms. He detailed plans to boost market competitiveness by creating an environment that allows global investors to easily invest in the Korean market.
He emphasized that the Korean government is implementing bold reforms to modernize the capital market as a key platform for economic growth, aligning with global standards.
Koo specifically mentioned improvements in corporate governance, three amendments to the Commercial Act to protect investors, and the introduction of a separate taxation system for dividend income. He pointed out that these efforts contributed to a more than 114% increase in the KOSPI index since the new administration took office last June.
Regarding MSCI developed markets index inclusion, he announced plans to swiftly implement 24-hour foreign exchange market operations and offshore won settlements. He also promised to significantly improve account opening and settlement processes for foreign investors and to greatly expand English-language disclosures.
Additionally, he noted that following the successful inclusion in the World Government Bond Index (WGBI) on April 1, approximately 5.1 billion USD has been newly invested in Korean government bonds as of the previous day.
Deputy Prime Minister Koo showcased Korea’s potential to lead in the artificial intelligence (AI) era, leveraging its semiconductor and advanced manufacturing capabilities. He explained that the government will focus on building AI infrastructure, including graphic processing units (GPUs), data, and workforce, while nurturing strategic technologies like graphene, superconductors, and small modular reactors (SMRs) to drive a physical AI transformation.
Before the Q&A session, Moon Ji-sung, Director General for International Economic Affairs at the Ministry of Economy and Finance, presented on recent trends in the Korean economy, fundamentals, growth drivers, government policy directions regarding the AI transformation, and reform efforts to enhance market accessibility.
He emphasized that exports, particularly in semiconductors, have surpassed 700 billion USD for the first time and are expected to accelerate this year due to a supercycle. Moon also highlighted that Korean companies account for about 80% of the global high bandwidth memory (HBM) market and that overseas orders are increasing in strategic industries such as shipbuilding and defense.
During the Q&A, attendees praised Korea’s capital market reforms, including improvements in corporate governance, enhanced shareholder protections, and increased dividend incentives, expressing optimism about investment opportunities.
They also showed significant interest in the AI transformation strategy and the government’s response to the Middle East conflict. Participants positively evaluated proposed reforms such as extending foreign exchange trading hours and allowing offshore won transactions and settlements to enhance the capital market’s attractiveness.
Attendees inquired about the government’s energy price stabilization policies in response to the Middle East conflict.
Deputy Prime Minister Koo highlighted the implementation of a maximum price system for petroleum products and a reduction in fuel taxes. He also mentioned a supplementary budget, funded by excess tax revenues without issuing deficit bonds, to support vulnerable populations.
Participants also raised questions about addressing stock market volatility and stabilizing exchange rates. Citi Bank Vice Chairman Jay Collins, who moderated the session, remarked that the message of Buy Korea resonated deeply.
Deputy Prime Minister Koo quoted President Lee Jae Myung’s statement from last September, expressing hope for interest in the Korean stock market while jokingly worrying that investors might enter too quickly ahead of Korean citizens. He concluded that if you haven’t invested yet, now might be the right time to consider it.