Deputy Prime Minister and Finance Minister Gu Yoon-cheol (구윤철) said South Korea's stock market remains at a low level compared with advanced economies and has room to rise further.

At a briefing with reporters at the Government Complex Sejong on May 11, Gu said of recent moves in local stocks, "The KOSPI has topped its record 7,000 and continues to rise." He also said the market capitalisation ranking has risen to seventh from 13th since the new government took office.

Asked how he views the current KOSPI level, he referred to the price-to-book ratio (PBR). Gu said, "There are statistics showing that, on a PBR basis, South Korea's stock market is still at a low level compared with advanced economies."

On the possibility of further gains in local stocks, he cited the semiconductor business cycle and demand for artificial intelligence (AI) as key variables. Gu said, "The semiconductor cycle changes depending on how the AI cycle develops," adding, "At least through next year, so-called 'preemptive buying' and advance orders have been made."

He added, "Global investors are investing based on the potential they see in South Korea's stock market."

He took a cautious stance on the possibility of reintroducing the financial investment income tax amid a stock market boom.

Gu said, "The financial investment income tax was abolished in 2024," adding, "As for this issue, it is a task to review once market conditions, including the state of the capital market, are sufficiently in place."

The financial investment income tax is a system that taxes income generated from financial investment products such as stocks, bonds and funds. Gu maintained that, at this point, capital market conditions should be reviewed first.