Kim Yongbeom: "Leveraged ETF Delisting for Samsung and SK Hynix Would Be an Enormous Shock, Hard to Imagine"

Kim responds to Seoul mayor's call to boost redevelopment and reconstruction

"Says it takes 3 to 5 years—decisions must be made cautiously"

Plans to meet Oh Sehoon to discuss supply in semi-industrial zones

Policy chief Kim Yongbum stated on July 19 regarding the real estate supply measures in the Seoul metropolitan area, "Redevelopment and reconstruction do not secure supply in a short period," adding, "Redevelopment and reconstruction are not the ultimate solution." However, he expressed his intention to meet with Seoul Mayor Oh Sehoon for discussions, as coordination with the Seoul metropolitan government is necessary.

Kim made these comments in response to a question about his thoughts on Seoul City's push to promote redevelopment and reconstruction during his appearance on KBS Sunday Diagnosis that day.

"Redevelopment and Reconstruction Take at Least 3–5 Years; Decisions Should Be Made Prudently"

Policy Chief Kim Yongbum is speaking at the Cabinet meeting held on July 14, 2026, at the Blue House, presided over by President Lee Jae-myung. Photo by Yonhap News.

Kim said, "In theory, redevelopment and reconstruction take at least 3 to 5 years to be realized," explaining, "Right now, we are in a period during which supply will not increase for about 2 to 3 years." He suggested that, considering the time required for redevelopment and reconstruction, these measures cannot immediately resolve the current shortage in real estate supply.

Kim further noted, "If redevelopment or reconstruction is decided upon, supply will decrease even more in the short term." He continued, "For instance, if we were to simultaneously redevelop or reconstruct 1,000 housing units across 30 complexes, 30,000 units would be demolished." He also pointed out, "There would also be an increase in demand for relocation in the short term, and there is a possibility that anticipation of redevelopment and reconstruction would further increase demand."

Kim emphasized, "This is a matter that requires careful consideration and comprehensive discussion," adding, "It would be inaccurate to simply say that if the government does not permit redevelopment or reconstruction, it is not genuinely committed to increasing supply."

However, Kim also stated, "Seoul contains quasi-industrial areas in Yeongdeungpo-gu and Guro-gu that span several million pyeong," and added, "When I mentioned this, Mayor Oh visited the sites, which I found very encouraging." He continued, "There is considerably greater potential for large-scale supply," noting, "This is not an issue that the Seoul City government can solve alone, but with cooperation from the central government, significant outcomes could be achieved. I have therefore arranged to meet with the mayor of Seoul."

Regarding real estate taxation, he said he is "mindful" of the argument to "increase holding tax and lower capital gains tax." He explained, "It is possible to design the system so that people are allowed to sell at an appropriate time, with somewhat higher costs imposed after a certain period elapses." However, he cautioned, "It is difficult to categorically state that if the holding tax is raised, the capital gains tax must also be lowered."

"Delisting of Leveraged ETFs Would Be an Enormous Shock, Hard to Imagine"

Kim also expressed opposition to recent calls to delist single-stock leveraged exchange-traded funds (ETFs) tracking Samsung Electronics and SK hynix, saying, "Such a move would cause tremendous shocks to the market; it is hard to even imagine."

He stated, "I believe we need to explore more diverse ways to minimize the shocks that these products may bring to the market at certain times," adding, "There are various ways to alleviate the burden of having to sell the products to align with the premium/discount, and these can be considered."

Kim further pointed out that leveraged ETF products inherently risk a discrepancy with their underlying assets, and that this discrepancy (tracking error) should be minimized. He said, "Does this tracking error really have to be managed within 30 minutes? Can't we expand it to about two hours? Is it really necessary to manage it only through selling the physical assets? Would it not be possible to manage it more appropriately using other derivatives? Financial authorities and securities firms will need to discuss this further."

Meanwhile, regarding recent remarks by Financial Supervisory Service Governor Lee Chanjin, who questioned whether there should have been stronger action to prevent the launch of single-stock leveraged ETFs, Kim explained, "I later heard that his intention was that the review should have been more stringent," adding, "The decision was made after deliberation together."

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