[Editorial] President's Stock Price Concerns Could Send Investors the Wrong Signal

Yonhap News Agency

President Lee Jae Myung said he is reviewing policies to normalize the stock market and will take necessary measures after receiving a report soon. At the same time, he drew a line, saying direct government intervention would be undesirable. We agree with the policy direction of creating a fair market. However, we would like the president to exercise greater caution when speaking publicly about stock price movements and signaling the possibility of government action.

Prices in the stock market constantly rise and fall. Gains are not always good, nor are losses necessarily bad. The process itself, in which overvalued stocks undergo corrections and undervalued stocks are revalued, is a normal function of the market. Stock prices reflect investors' assessments of corporate value, expectations and risks. The government should not set a desirable level for stock prices and try to move the market toward it.

Above all, it is important to uphold the principle that investors are responsible for their own gains and losses. If expectations spread that the government will respond whenever stock prices fall, investors may underestimate risks or make reckless investments. Even if the president has no such intention, it is important to recognize that his remarks could be misread as a signal by the market.

Of course, unfair practices such as market manipulation and false disclosures must be strictly policed. It is also the government's responsibility to prevent controlling shareholders from abusing their authority, protect the rights of ordinary shareholders and improve corporate transparency. If these problems undermine market confidence and prevent companies from receiving a fair valuation, they need to be actively addressed.

It is only natural for the president to take an interest in the stock market and oversee improvements to the system. Even so, we would like him to be restrained in his remarks so that policy attention does not fuel expectations of stock price management. We should be wary of the notion that rising stock prices are a government achievement while falling prices are a problem the government must solve. The capital market can grow healthily when the government is responsible for ensuring fair trading practices and leaves investment decisions, and their consequences, to investors.

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