For the first time in three and a half years, Korea’s benchmark KOSPI index has surged past the 3,000-point milestone, renewing speculation over the sustainability of the so-called ‘Lee-Jaenomics’ economic policies. While the market’s first encounter with “Samcheonpi” in early 2021 was dismissed as a fleeting product of a liquidity-driven boom, the rally that led to the June 20, 2025 breakthrough is notably different.

This surge is the product of multiple forces converging: the return of foreign investors, the policy agenda of the new administration—dubbed ‘Lee-Jaenomics’ after President Lee Jae-myung—and shifting global supply chains.

Domestically, President Lee, even during his campaign, pledged to transform Korea’s capital markets, famously declaring his goal of “KOSPI 5,000.” His reform agenda centers on improving market transparency—through moves such as introducing the ‘3% rule’ via amendments to commercial law—while concurrently easing regulations on securities, banks, and financial holding companies, and offering tax incentives. These efforts aim to reduce the long-standing “Korea discount.” Major supplementary budgets, consumption-boosting vouchers, and SOC (social overhead capital) investments designed to counter local population decline are also bolstering domestic momentum.

Another crucial driver has been the reversal in foreign capital flows. After nine straight months of net selling, foreign investors have returned on faith in a stronger Korean won and renewed policy confidence, snapping up stocks in finance and consumer sectors. Unlike the retail investor-led rally of 2021, which proved highly volatile due to the absence of foreign buyers, the current rally has attracted sustained overseas interest. As Lee Soo-jung of Meritz Securities notes, “The correction everyone’s waiting for might never come,” a sentiment that seems to be reflected in recent market behavior.

Global variables also add intrigue. While President Donald Trump’s revived tariff strategies inject new unpredictability into the international landscape, they paradoxically benefit Korea’s shipbuilding, defense, and nuclear sectors. The U.S. government has asked Korean shipbuilders for collaboration in military and merchant shipping, while the worldwide surge in defense demand is driving a structural uptrend amid volatile defense budgets. The successful Czech nuclear plant bid, led by “Team Korea,” further underscores the country’s emergence as a key player in a new era prioritizing energy security.

Industry analysts now identify four “top themes” for the latter half of the year: financials, holding companies, defense, and nuclear energy. Financials and holding companies are seen as riding the wave of capital market modernization, while the defense and nuclear sectors stand to benefit from shifting geopolitical and energy trends. Domestic consumer companies seeking to break out of stagnation are also on watch for potential upgrades. Nevertheless, key risks remain.

Should Trump-style tariff wars resurface, the impact could include sluggish exports and increased raw material price volatility. Ongoing Middle East instability could also hit energy and logistics costs. Still, despite concerns over potential market overshooting, the rally points to a correction of extreme undervaluation in Korean stocks—a necessary structural shift.

For investors, two factors warrant close scrutiny. First, the progress of policies supporting market reform: the pace of legislative action on commercial and tax law revisions, as well as the concrete details of the government’s value-up program, will directly impact market valuations. Second, earnings momentum is crucial: sectors prioritizing profitability over sheer scale—especially securities, insurance, and holding companies—are likely to see revaluations if positive policies translate into strong results.

Ultimately, KOSPI’s return to 3,000 is not the final stop, but a waypoint. When structural reforms to capital markets translate into real economic growth and corporate earnings, 3,000 will be viewed not as a summit, but as a baseline. As President Lee promised to make equity investment as viable as real estate, the Korean stock market in the second half of the year will serve as a key proving ground to see if policy, performance, and sentiment can align to realize this vision.

Much anticipation remains over how far ‘Lee-Jaenomics’ can elevate Korea’s once-sluggish economy.

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo = Yonhap News Agency, Presidential Office

(MHN 관리자 )