DP: "KOSPI Hits Record Highs While KOSDAQ Stays at 900... Bold Tax Measures Like Capital Gains Tax Cuts Needed"

Ando Geol of the Democratic Party of Korea

Democratic Party Policy Meeting

Expansion of Policy Funds for Active and Specialized Funds

On June 23, the Democratic Party of Korea proposed measures to revitalize the KOSDAQ market, which has shown relatively lackluster performance compared to the robust KOSPI market. Suggestions included the need to consider introducing bold tax incentives to boost the KOSDAQ.

Assemblyman Ando Geol of the Democratic Party urged during the party’s policy meeting at the National Assembly that “the government should go beyond the limits of existing short-term measures and devote itself to a fundamental policy shift that transforms the structure of the KOSDAQ market.”

Assemblyman An pointed out, “While the KOSPI continues to hit new record highs, the KOSDAQ index, which serves as a cradle for small and venture companies, remains stuck around the 900-point level, widening the gap between large-cap and small-to-mid-cap stocks—a sign of deepening polarization in the stock market.” He added, “If this imbalance continues, it could hamper the healthy growth of the capital market as a whole, restrict the ability of high-growth-potential venture startups to raise funds, and ultimately shrink the new industry ecosystem.” He further diagnosed, “The stagnation of the KOSDAQ, where individual investors account for 85% of the market, limits the ability of many shareholders to build wealth.”

While positively evaluating the government’s KOSDAQ revitalization measures, Assemblyman An also pointed out “critical blind spots.” He said, “As value-up funds are being funneled primarily into ETFs focusing on a few blue-chip stocks, the liquidity improvement felt by small and venture companies remains marginal.”

Byungdo Han, Floor Leader of the Democratic Party of Korea, is speaking at the party strategy meeting held at the National Assembly on June 23, 2026. Photo by Hyunmin Kim

In this context, he proposed solutions.

First, he said, “We need to prevent the concentration in blue-chip ETFs and ensure that liquidity is more directly supplied to small and mid-cap stocks.” He emphasized that “when allocating funds from pension funds and policy capital, the proportion assigned to active funds and specialized funds targeting promising small and mid-cap stocks should be increased, rather than relying solely on index-tracking ETFs.”

He went on to say, “To establish a culture of long-term investment in the KOSDAQ market, the introduction of bold tax incentives such as the separate taxation of dividend income and capital gains tax reductions for individuals and institutions holding shares over the long term should be considered.”

Additionally, he asserted, “To prevent KOSDAQ-listed companies from moving up to the KOSPI, measures should be taken to guarantee a KOSDAQ premium—such as corporate tax reductions—while at the same time, companies that are persistently underperforming should be strictly delisted to enhance the market’s transparency and credibility.”

Assemblyman An emphasized, “A 9,000-point level driven solely by the dominance of a few conglomerates has clear limitations in terms of sustainability. Only when the many small and venture companies on the KOSDAQ are given fair opportunities in the capital market and grow together can our stock market truly usher in a robust era at the 10,000-point mark.”

This content was produced with the assistance of AI translation services.