Korean Dow Jones
Samsung Securities said on Nov. 27 that the Financial Services Commission’s measures for stock market development announced on the previous day fell short of expectations.
“The plan’s short-term effects are likely to be limited because it is closer to long-term measures for reshaping of the market,” it commented, continuing, “Tax revenue-related measures such as stock trading tax cuts and additional incentives for dividend stock funds have not been included, while the impact of the expansion of price limits on the trading value is vague as of now.”
It added that the correlation between the introduction of the Korean version of the Dow Jones Index and stock price rise is rather weak and the introduction of the private pension fund investment pool is insufficient to attract fund investors in the near future.
According to the commission’s plan, futures and options investment is allowed for individual KOSDAQ stocks and the KTOP30, which consists of 30 stocks representing KOSPI and KOSDAQ, is launched as the Korean version of the Dow Jones Index.
The private pension fund investment pool is established in order to strengthen the role of institutional investors. Until recently, pension funds of smaller sizes such as private college funds and employee welfare funds have refrained from joining the stock market due to their lack of assets and operating capabilities. However, the investment pool is going to be entrusted with the management of the funds down the road so that the long-term and short-term funds are run by the lead managers and the Korea Securities Finance Corporation, respectively.