From 5,000 to 6,000 in a Month.

• The global stock market capitalization now ranks 9th, surpassing Germany and France.
• Hyundai Motor and Kia shares rose 9.2% and 12.7% as IPO prospects for subsidiary Boston Dynamics circulated.
• Foreign investors sold, while individuals and institutions bought.
• Nomura Securities projected the KOSPI could reach 8,000 in the first half.
• Up 44% year-to-date. Samsung Electronics and SK Hynix accounted for 66% of this year’s gains.

The Hero of 14 Million Retail Investors.

• Bloomberg assessed Lee Jae-myung (President) this way.
• Lee Jae-myung experienced the structural inequalities of the Korean stock market in his early 30s while incurring losses from short-term stock trading—an experience that Bloomberg analyzes as shaping his capital market reforms.
• Peter Kim (KB Securities investment strategist) told Bloomberg in an interview, “The shift from a real estate-centered asset structure to one focused on financial assets will be the most significant change in Korea over the next decade.”
• Mixco Das (JP Morgan head of strategy) stated, “While capital market reforms are important and beneficial for corporate valuations, attributing the KOSPI’s rise solely to government policy is an overstatement of its impact.”
• Related Link.

Foreign Investors Outpace Korean Retail Traders.

• Last year, external financial assets reached a record $2.8752 trillion.
• External financial liabilities (foreign investment in Korea) also hit a record $1.9710 trillion.
• This is the first time since 2020 that net external financial assets have decreased due to increased foreign investment—meaning money flowed in from abroad. It helps stabilize the exchange rate.

What Matters Now.

Last-Minute Tweaks to the “Legal Distortion” Law.

• Amendments were made just before the bill passed the Legislation and Judiciary Committee and went to the plenary session—inevitably sparking accusations of rushed legislation.
• The Democratic Party adopted it as official party policy during a general meeting. Of 162 members, 124 attended, with 77 voting in favor.
• The scope was narrowed by limiting the law to criminal cases, adding the phrase, “discretionary judgments within reasonable bounds are not applicable,” and deleting the clause, “cases where facts are recognized in clear contradiction to logic or empirical rules.”
• Hardliners within the Democratic Party are pushing back. Kim Yong-min (Democratic Party lawmaker) protested, “Respect the Legislation and Judiciary Committee’s decision.”
• Baek Hye-ryeon (Democratic Party lawmaker) countered, “The criteria are like a nose ring or an earring—whatever fits the moment.”
• Ultimately, party leader Lee Jung-kye (Democratic Party leader) intervened, saying, “I’ve been a Legislation and Judiciary Committee chair, and sudden adjustments happen,” and pushed for a vote, stating, “If consensus isn’t reached, party policy should prevail.”
• Lee Chang-hyun (professor at Hankuk University of Foreign Studies) criticized, “The elements are subjective, making punishment criteria vague and raising significant constitutional concerns.”
• In an editorial, The Korea Daily remarked, “Ramming through a bill irrelevant to public welfare—one that only hardcore supporters would applaud—is certainly not helpful for the Lee Jae-myung administration’s success.”
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Lee Jae-myung’s Damage Control: “The Democratic Party Lacks Nothing.”.

• The Democratic Party has been roiled by the “New Lee Jae-myung” controversy over the past few days—a clash between hardline pro-Lee factions and Rep. Chung Cheong-wae (Democratic Party leader).
• Lee Jae-myung (President) stepped in to mediate: “There has been no instance where the president was sidelined, nor have I ever felt that way.”
• Some interpret this as tacit support for Chung Cheong-wae, but others read subtext: “Isn’t this a pointed critique of the party’s failure to align with the Blue House—and a push to do better?”
• Rumors also circulate that some lawmakers close to Chung opposed the Daejeon–South Chungcheong merger behind the scenes, causing presidential discomfort.

Gongchumo and Chung Cheong-wae.

• Chung Cheong-wae (Democratic Party leader) said he would absorb the “Lee Jae-myung Indictment Cancellation Group” into an official party body.
• Gongchumo drew a line: “We plan to operate as a separate organization.”

Mandatory Share Buybacks, Next: Anti-Price Suppression Law.

• Third corporate law revision has passed. Newly acquired treasury shares must be retired within one year. Shares acquired before the revision get a 18-month deadline.
• An anti-price suppression law is also being drafted. For listed companies with a price-to-book ratio (PBR) below 0.8x, inheritance and gift taxes will be calculated based on 80% of net asset value—not market price. With taxes fixed regardless of stock price, incentives to artificially depress valuations diminish.
• Inheritance and gift tax reforms are also planned.

Corporations Holding Treasury Shares.

• As of May last year, among 79 conglomerates with assets exceeding 5 trillion won, 414 companies held treasury shares.
• Lotte Holdings leads with 32%, followed by SK at 25%, Mirae Asset Securities at 19%, Doosan at 17%, Hanwha Life Insurance at 14%, Samsung Fire & Marine Insurance at 13%, Korea Zinc at 12%, and Samsung Life Insurance at 10%. Most are groups with ongoing management control disputes.

Deep Dive.

Widening Asset-Labor Income Gap.

• South Korea’s labor income share was 67.9% as of 2024—slightly down from 68.7% in 2023. This measures the proportion of national income derived from wages and other labor compensation.
• The U.S. stood at 53.8% as of last year’s third quarter.

“Tariffs Will Only Strengthen.”.

• Trump spoke for 1 hour and 47 minutes during his State of the Union address—the longest in history.
• He denounced the Supreme Court for ruling mutual tariffs illegal. “No congressional help needed—we can maintain tariffs at the executive level and have stronger solutions,” he claimed.
• He asserted securing over $18 trillion in investment pledges, but this is false. The White House’s official tally is $9.7 trillion.

Will Jeonnam-Gwangju Integration Succeed?

• A metropolitan government with 3.17 million residents and a regional GDP of 158 trillion won will emerge.
• Will Yeosu become Yeosu City under Gwangju Special Metropolitan City? Many details remain unresolved.
• The location of the administrative headquarters has not been decided.
• The government will provide up to 20 trillion won in support over four years for the integrated Jeonnam-Gwangju city.
• Welfare benefits will also increase. Jeonnam’s monthly 200,000 won birth basic income and Gwangju’s monthly 500,000 won youth job-seeking allowance will be combined.

Has the Era of Non-Cleansing Begun?

• There’s talk that without close ties to the leadership, securing a nomination is nearly impossible.
• Oh Young-hoon (Governor of Jeju) received a notice of nomination disqualification. In a region where primaries are said to be the main event, there’s much backtalk over Oh—whose factional ties are weak—being cut off.
• Oh served as chief of staff to Lee Nak-yon (then Democratic Party leader).

Another Take.

255,000 Births Last Year.

• Total fertility rate rose to 0.80—down to 0.72 in 2023.
• Marriages delayed during the pandemic increased, leading to births 2–3 years later. The population of early 30s, dubbed “echo boomers,” is also relatively large.
• Echo boomers are children of the second baby boomers (1964–1974). They were born between 1991 and 1995.
• The OECD average is 1.43. Japan’s is 1.20.
• Jeon Young-soo (Hanyang University professor) noted, “As the number of women of childbearing age declines and the base effect fades, the decline could steepen in 2–3 years.” Lee Chul-hee (Seoul National University professor) emphasized, “Policies must address housing, education, and labor issues to sustain a long-term rebound.”
• Some argue the next six years are a golden window. Seol Dong-hoon (Jeonbuk National University professor) warned, “If structural turning points aren’t created within six years—when 2002-born cohorts reach their 30s—the rebounded fertility rate will collapse.”
• Related Link.

Is Proposing Land for Farmers Communist?

• Lee Jae-myung (President) wrote this on X.
• “This is not about targeting farmland inherited or left fallow due to old age. If someone deceives to acquire farmland by claiming they’ll farm it but then doesn’t, the land must be disposed of per the Constitution’s principle of ‘land to the tiller.’”
• Under the Farmland Act, only those who farm can own land. A farming plan is required, and if farming stops, the land must be sold. The government can issue sale orders.
• From 2018–2023, 5,855 people received disposal notices. In 2023 alone, 11.2 billion won in enforcement fines were imposed for non-compliance.
• Backlash erupted after Lee ordered a full farmland audit. He countered:
• “It was Syngman Rhee (former president) who enshrined the ‘land to the tiller’ principle in the Constitution, forcibly acquired land from non-farming landlords, and redistributed it to farmers. Was Syngman Rhee a communist?”
• Non-farmers buy land speculating on price hikes, forcing actual farmers to tenant-farm. According to the Korea Rural Economic Institute, 44% of farmland is owned by non-farmers—up from 33% in 1995.
• Past governments discussed absentee landlords and subsidy issues but never conducted a full audit.
• Woo Suk-hoon (author) assessed, “I’m not sure if Lee Jae-myung’s government will leave a legacy in history books, but this will surely occupy a page in agricultural and economic history.”
• Related Link.
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The Fix.

6 AM Start Time on Contract, 1 AM Reality.

• This is the daily grind for cleaning workers at Seoul’s Gangdong District Office. Their contracts state work hours from 6 AM to 3 PM, yet they are routinely demanded to report at 1 AM as if it’s a given.
• The issue boils down to staffing. The subcontracting company designated five of the workers contracted by the district office as administrative staff, reducing the number of field workers. With fewer hands, finishing on time forces early-morning shifts to expand.
• Kim Yu-seon (Korea Labor and Society Institute Chair) said, “Direct public employment is ideal, but if that’s not immediately feasible, alternatives like paying workers directly or publicly disclosing problematic subcontractors could help.”
• Related Link.

Price Gouging: Fines Alone Won’t Cut It.

• Yesterday, a national tourism strategy meeting was held under the president’s leadership.
• Until now, most cases of failing to display or adhere to posted rates resulted in little more than corrective orders or warnings. Going forward, penalties will escalate: first offense—5-day suspension, second—10 days, third—20 days.

Half of Apartments Lack Sprinklers.

• 51% of 49,810 apartment complexes lack sprinklers.
• 86% of 31,271 lodging facilities lack them.
• The sprinkler installation mandate was introduced in 1990.
• Even when sprinklers exist, they often fail to operate. Only 16% functioned properly at fire scenes.
• Experts advise installing automatic fire extinguishers—costing around 20,000 won—if sprinklers are impractical.
• Related Link.

ICYMI.

“25.6 Billion Won Can Be Forgone.”.

• Min Hee-jin (former ADOR CEO) held a press conference and requested that NewJeans halt its lawsuit.
• “I propose that in exchange for forgoing the 25.6 billion won, all ongoing lawsuits be stopped and the dispute resolved,” she said.
• HYBE, ADOR’s parent company, has terminated its contract with NewJeans member Daniel and is pursuing a 43 billion won lawsuit. Min Hee-jin had won a lawsuit against HYBE and was set to receive 25.6 billion won—but now proposes to abandon it.
• “I cannot bear to watch five members who should be happily performing, some onstage and some in court,” she said.

Chosun Ilbo’s Proposal: “Is It ‘Yoon Again’? Let Party Members Decide.”.

• People Power Party membership grew from 300,000 during Lee Jun-seok’s tenure (then PPP leader) in 2021 to 830,000 after Yoon Suk-yeol’s election, and further to 1 million under Jang Dong-hyuk’s leadership (PPP leader). The pro-Yoon faction holds the majority—this explains Jang’s resilience.
• Yang Sang-hoon (Chosun Ilbo editor-in-chief) stressed, “The only thing left is a party member vote.” This solution was proposed by Lee Seong-gwon (PPP lawmaker), Kim Geun-sik (PPP chapter head), and others.
• If the anti-Yoon faction wins, Jang Dong-hyuk could step down and reorganize the party.
• If “Yoon Again” wins? The party would inevitably split.
• Yang pointed out, “Those who idolize Yoon or believe election fraud conspiracy theories are a minority among the general public, but if this minority controls the conservative party, it’s a politically significant problem.”
• Chosun Ilbo’s anxiety permeates its pages.
• Related Link.

Worth Reading.

A Progressive Regime’s Housing Price Legacy.

• Can Lee Jae-myung (President) avoid repeating Moon Jae-in’s (former president) mistakes? There is a learned trauma that housing prices surge under progressive governments, but the sharp decline in the Housing Price Outlook Index in February is at least a positive signal.
• Oh Kwan-cheol (KyeongHyang Shinmun Socioeconomic Research Institute head) emphasized, “Strengthening property taxes is a task that cannot be ignored to dismantle the real estate republic.”
• There is a socially agreed principle:
• Integrate the comprehensive real estate tax with property taxes and redesign the overall property tax system.
• Multiple homeowners should not be treated as speculators.
• To curb the “single solid property” mentality, long-term ownership tax deductions must also be revised.
• Oh Kwan-cheol stressed, “If the government communicates with the market in restrained terms but steadfastly pushes its principles, the psychology of ‘just hold on’ will eventually crack.”
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‘New Lee Jae-myung’ Bears No Guilt.

• Lee Jae-myung (President)’s support base is divided into ‘Old Lee Jae-myung’ and ‘New Lee Jae-myung.’ Maintaining ‘New Lee Jae-myung’ could preserve over 60% approval ratings, but losing him would plunge support to the 40% range—this was the common-sense analysis from The Hankyoreh.
• However, during recent merger talks between the Democratic Party and Cho Kuk’s New Party, the meaning of ‘New Lee Jae-myung’ has shifted.
• ‘Old Lee Jae-myung’ = pro-Moon Jae-in (former president) = pro-merger Vs. ‘New Lee Jae-myung’ = ‘authentic’ Lee Jae-myung = anti-merger.
• Lee Se-young (Hankyoreh political editor) diagnosed that the Democratic Party’s internal division—once a political arithmetic of addition (securing both core and swing voters)—has become a subtraction of factionalism. A chance to expand the center and pursue 30 years of governance has arrived, yet the party is splitting sides and escalating infighting.
• Lee Se-young noted, “Whether the Democratic Party seizes or squanders this opportunity depends on how it leverages the name ‘New Lee Jae-myung.’”
• Related Link.