Summary of the KOSPI’s Rise to 5,000 – A News Article Analysis
This news article details the recent surge of the KOSPI (Korea Composite Stock Price Index) to 5,000,a historic milestone 43 years after its launch in 1983. Here’s a breakdown of the key points:
Past Context of KOSPI Fluctuations:
* Early Days (Post-1983): Initially driven by the “Chahwajeong” rally (automotive, chemical, oil refining) and the 2017-2018 semiconductor boom, the KOSPI remained largely within the 2000-2200 range.
* COVID-19 Pandemic (2020-2021): The pandemic sparked the “Donghak Ant Movement” (a surge in individual investment), pushing the KOSPI above 3,000 (January 2021) and then 3,300 (June 2021).
* Recent Volatility (2024): A dip in late 2024 due to a “martial law incident” and US tariffs was followed by a recovery, breaking 4,000 in October of last year.
* Current boom (2026): Fueled by the structural growth of the semiconductor industry (driven by AI demand) and increased investment,the KOSPI reached 5,000 within three months of the start of 2026.
President Lee Jae-myung’s Role & Policies:
* Campaign Promise: Reaching KOSPI 5000 was a key pledge during Lee Jae-myung’s presidential campaign.He even publicly invested 40 million won in domestic ETFs.
* Addressing the “Korea Discount”: Lee identified four major risks contributing to the undervaluation of the Korean stock market:
* Korean Peninsula peace risk
* Governance and management risk
* market order risk (stock price manipulation)
* Political risk
* Commercial Act Revisions: He spearheaded revisions to the Commercial Act to improve corporate governance and protect shareholder value:
* First Amendment: Expanded directors’ duty of loyalty to shareholders.
* Second Amendment: Introduced mandatory cumulative voting,empowering minority shareholders.
* Third Amendment (in progress): Requires companies to cancel their own shares.
* Crackdown on Manipulation: A joint task force was launched to combat stock price manipulation and unfair trading practices.
Overall Significance:
The article highlights the KOSPI’s unprecedented rise to 5,000 and attributes it to a combination of economic factors (semiconductor boom, AI demand) and proactive government policies under President Lee Jae-myung aimed at improving the stock market’s structure and investor confidence. The article suggests a focus on long-term, sustainable growth and improved corporate governance as key to maintaining this momentum.
