September 11, 2025
SEOUL – South Korea’s stock market is surging to unprecedented heights as President Lee Jae Myung marks his first 100 days in office, with the benchmark Kospi touching an all-time high Wednesday.
The rally is stoking expectations that Lee’s pledge to usher in a “Kospi 5,000” era could be more than rhetoric, as investors bet on the government’s policy support to boost the stock market.
During his presidential candidacy, Lee pledged to make the Kospi reach over 5,000 points, eliminating the “Korea discount,” referring to the relatively low valuation of companies listed here.
Backed by the investor momentum, the Kospi posted a sharp gain shortly after Lee took office on June 4, crossing the 3,000-point mark on June 20, climbing past 3,100 on June 24, and exceeding 3,200 on July 14.
Lee’s Kospi 5,000 vision, however, encountered a major hurdle when the government introduced a plan to lower the threshold for capital gains tax on stock holdings from 5 billion won to 1 billion won ($3.6 million to $720,000), effectively tightening taxation on July 31. The market responded with a 3.88 percent plunge the following day, paring the gains.
Market sentiment has been renewed with anticipation that the government will drop the reform to boost the domestic stock market. Lee is expected to announce the measure at a press conference scheduled for Thursday.
“Lee is expected to address the standards for defining major shareholders subject to capital gains tax at the conference,” Presidential Chief of Staff Kang Hoon-sik said in a briefing held Tuesday.
Amid the building anticipation, the Kospi reached an all-time high Wednesday, reaching as high as 3,317.77 during intraday trading. The record surpasses the previous intraday trading high of 3,316.08 set on June 25, 2021.
The index closed trading at 3,314.53, exceeding the previous closing high of 3,305.21 set on July 6, 2021, as well.
The latest rally is fueling hopes that the Kospi could surge past 5,000 points in the near future.
Following the inauguration of the Lee administration on June 4, the Kospi index rose 22.81 percent up until Wednesday, data from the Korea Exchange showed. The surge marks the sharpest increase observed under any recent administration over a similar time period.
“The Kospi 5,000 vision is not unrealistic. Arithmetically, if the index stabilizes above 3,300 points and climbs 9 percent annually, it could reach 5,000 in five years,” said Lee Woong-chan, an analyst at iM Securities.
“There is room for optimism if corporate innovation and consistent policy support can shift the market toward sustained growth,” he added.
With offshore investors holding roughly 30 percent of Kospi-listed shares, and around 50 percent of some major blue-chip shares, an inflow of foreign capital remains crucial for the index’s gain.
Wednesday’s rally was led by foreign investors’ 1.37 trillion won buying spree on the bourse.
From June 4 to Wednesday, offshore investors net bought shares worth 10.16 trillion won on the Kospi.
“As proactive government intervention and policy support for capital markets have become common in global markets, the Korean government’s willingness to align with the trend would be effective in enhancing the competitiveness of the domestic capital market,” said Lee Kyung-soo, an analyst at Hana Securities.