Government's 'Stock Price Suppression Prevention Law' Fuels Market Anxiety Amidst Effectiveness Debate

The government has announced a tax reform plan to prevent acts that artificially lower stock prices. This was introduced with the aim of preventing companies from manipulating stock prices to reduce capital gains tax for major shareholders. However, experts point out that this reform plan, contrary to its original purpose, still includes regulations linked to stock prices, thus diminishing its effectiveness.

The government's tax reform plan proposed a method of paying taxes differently when stock prices fall, but it is criticized for still regulating based on stock prices because it continues to levy taxes by monitoring the extent of the stock price decline. In other words, it does not eliminate the need to lower stock prices, but rather imposes additional taxes based on how much they have been lowered. Experts believe that this method makes it difficult to curb companies' intentions to manipulate stock prices.

Concerns are being raised that the government's 'Stock Price Suppression Prevention Law' has many loopholes, nullifying its intended purpose. The bill is designed to exclude companies from regulation if they avoid the stock price decline ranking only twice over a period of six and a half years.

Experts analyze that companies intending to deliberately suppress stock prices could easily meet such conditions. It is not difficult to temporarily raise stock prices using one or two favorable events. This is interpreted as essentially providing companies with an 'escape route' to avoid regulation.

Concerns are being raised that the government's stock price suppression prevention law may instead negatively impact the market and induce long-term stock price declines. Analysts suggest that companies may try to manage stock prices over a longer period to avoid regulation.

Companies that previously focused on short-term stock price caution may now adopt a strategy of lowering stock prices for a long period of over three years due to the bill's influence. This could act as a more sustained and widespread downward pressure on stock prices in the market, contrary to what the bill intended, thus requiring deep consideration of its side effects.

The government's stock price suppression prevention law is ultimately decided through a review committee of the National Tax Service. In this process, the companies concerned will have the opportunity to prove that they had no intention of tax evasion. If this explanation is accepted, the company will be completely exempted from the regulation.

This raises concerns that the enforceability of the bill may be weakened. If companies can avoid regulation with a mere formal explanation, the practical effectiveness of the bill could be significantly undermined. Consequently, criticism is being raised that it will be difficult to effectively prevent artificial stock price manipulation by companies.

An analysis suggests that the actions of the U.S. Federal Reserve (Fed) Chair have changed compared to the past. The previous Chair increased communication with the market, while publicly mentioning relations with President Trump only to a certain extent. However, it is pointed out that the current Chair is increasing communication with President Trump while reducing communication with the market.

This change is noteworthy as it could be linked to the issue of the Fed's independence. Increased direct communication between the Fed Chair and the President could act as an unexpected variable in the market and potentially influence future monetary policy directions, thus requiring close monitoring of its background and impact. Critic Park Si-dong stated, "In the past, the previous Chair would just say that Trump called, and increased communication with the market. But now, it's going the other way. Well, we need to see how we should interpret that."

It is analyzed that many of the major concerns that weighed down global stock markets, especially the domestic market, during July have largely dissipated. Doubts about the sustainability of the AI industry, the extent of capital expenditure (CAPEX) expansion, and the possibility of a semiconductor market peak out had pressured the market. However, the market seems to have reached a positive conclusion regarding these concerns.

As CAPEX investment continues smoothly and AI-related companies are showing good performance, uncertainties related to AI and semiconductors have decreased. Now, 'interest rates' are emerging as the final and most important variable to move the stock market. Critic Park Si-dong explained, "What weighed down global stock markets, especially our market, throughout July was the skepticism: 'Can AI continue?', 'Will CAPEX investment continue?', 'Are you making good money again?' And intertwined with that was the big question, 'Isn't this the peak for semiconductors?' These big questions pressured the stock market in July, didn't they? But the market reached a conclusion. 'CAPEX investment is fine. And AI-related companies are already making good money. Then there's no problem. Isn't it just going to keep going?' At that point, the last remaining variable is interest rates."

The U.S. 10-year Treasury yield has shown unusual movements, rising by over 10% in the last six months and effectively reaching an all-time high. Currently, the 10-year Treasury yield has surpassed 4.68%, and the 30-year Treasury yield is also above 5.2%. This is considered a very high level.

This sharp rise in Treasury yields appears to be the result of a complex combination of various factors. If the high interest rate environment continues, it could increase borrowing costs for companies and relatively reduce the attractiveness of the stock market, thus placing a burden on the overall economy. Therefore, attention is focused on future trends.

Alphabet, Google's parent company, is pushing to issue corporate bonds worth up to $25 billion to finance its artificial intelligence (AI) infrastructure investments. This move, releasing large-scale corporate bonds into the market while Treasury yields are rising, could put additional pressure on the bond market.

Bloomberg analyzed that the outcome of Alphabet's corporate bond issuance will be an important indicator for gauging the financing environment for AI infrastructure investment, investor sentiment, and the future bond issuance environment for big tech companies. Anchor Kwon Da-young commented, "Adding another reason for rising interest rates, Alphabet today also announced plans to issue corporate bonds worth up to $25 billion. So, with Treasury yields rising and companies also issuing bonds, interest rates will inevitably continue to face pressure. Bloomberg stated that the results of Alphabet's corporate bond issuance will be an important indicator for gauging the financing conditions for AI infrastructure investment, sentiment, and the future bond issuance environment for big tech companies."

Experts are divided on the impact of the U.S. Federal Reserve's (Fed) interest rate hike decision on the market. Some experts argue that the best way for the Fed to resolve market uncertainty is to raise rates once and then send a clear message that they will be frozen for a while. The expectation is that clear guidance will reduce market confusion and promote stability.

However, others express concern that if the Fed vaguely monitors the situation again in September, uncertainty will actually increase. If the interest rate hike decision is delayed, the market will find it difficult to predict the Fed's next move, which could lead to a contraction in investor sentiment.

The Fed's interest rate policy has a significant impact on the global economy, so any decision could simultaneously generate market expectations and dissatisfaction. Attention is drawn to what choice the Fed will make in the future, and what repercussions that choice will have on the market. One expert said, "I think an interest rate hike is best, and a message that it will be raised once and then held for a while seems good. But if they just vaguely sit back and watch in September, uncertainty will increase again."

The currency cooperation efforts between the U.S. and Japan are unintentionally expanding global liquidity, which in turn is creating a complex situation that intensifies interest rate hike pressures. If Japan sells U.S. Treasury bonds to defend its currency, U.S. Treasury yields could rise. Therefore, the U.S. is trying to intervene by directly holding Japan's Treasury bonds and providing dollars.

However, this type of currency cooperation could ultimately lead to an additional supply of dollar liquidity in the market. This phenomenon runs counter to the central bank's tight monetary policy of raising interest rates. Analysts suggest that this liquidity expansion could increase inflationary pressures, creating a difficult situation where the Federal Reserve (Fed) has no choice but to raise interest rates.

Former President Donald Trump continues to directly call the Federal Reserve (Fed) and intervene in monetary policy. This is an abnormal act that severely undermines the Fed's independence and was originally unimaginable. Media reports also indicate that Trump and the Fed Chair frequently communicate, leading to incredulous reactions within the U.S.

Experts point out that this situation is an example of the U.S. system being significantly broken. However, on the other hand, there is also an analysis that because former President Trump has shown such unconventional behavior, there is a certain public atmosphere of 'just accepting' his abnormal actions. The interpretation is that as expectations have lowered, an understanding of 'that's just how he is' has formed.

News that SoftBank's Vision Fund business profit plummeted by 65% year-on-year has sounded a small warning bell in global investment markets. Particularly, given that the Vision Fund has made large-scale investments in artificial intelligence (AI)-related fields, there is great interest in the impact of this profit decline on overall AI investment.

Currently, SoftBank explains that the main reason for this profit decline is the fall in the stock price of Didi Global, a Chinese ride-hailing service company. However, experts believe that in addition to this explanation, further analysis and disclosure of information are needed regarding how much other AI-related investments by the Vision Fund were affected. As there is vigilance about the possibility of an AI investment bubble, attention is focused on what impact this case will have on overall investment sentiment in the AI industry.

An analysis shows that Japanese investors are not interested in the Korean stock market. Compared to their active investments in the U.S. market, their investment proportion in the Korean market is notably low. Japanese investors commonly cite the 'lack of shareholder return policies' by Korean companies as the biggest reason for this phenomenon.

From the perspective of Japanese investors, Korean companies are lacking in efforts for shareholders, and this significantly reduces investment attractiveness. In developed markets, increasing shareholder value through dividends and share buybacks has become a common management practice, but this aspect is still insufficient in Korea.

This perception could negatively impact Korean companies' capital raising in the long term. In a trend where global capital flows towards companies with efficient shareholder return policies, Korean companies are expected to face increasing pressure to strengthen shareholder-friendly policies.

Ultimately, the neglect by Japanese investors can be interpreted as a signal demanding fundamental reflection on Korea's corporate governance and shareholder return culture.

An analysis shows that China is effectively dividing the global battery market with its low-price strategy in the Lithium Iron Phosphate (LFP) battery market. This strategy contrasts with Korean battery companies, which aimed to lead the market by emphasizing their technological superiority in high-performance premium batteries based on Nickel-Cobalt-Manganese (NCM).

Chinese companies are targeting the market by mass-producing and supplying LFP batteries at low prices, even if they have slightly lower capacity and slower charging speeds, due to their excellent price competitiveness. This has resulted in a segmentation of the market into those pursuing high performance and those prioritizing price competitiveness, posing a threat where the superiority of Korean battery technology loses its luster in the low-cost market.

Facing China's low-price offensive with LFP batteries, the Korean battery industry has moved to revise its strategy. The plan is to concede the automotive LFP battery market to Chinese companies and instead focus on the energy storage system (ESS) market to secure a competitive advantage.

Rather than directly confronting China in the automotive LFP market, Korean companies are looking to build differentiated competitiveness in the ESS sector, where technological prowess and safety are even more crucial. This is interpreted as showing Korea's determination to preempt the ESS market based on its high-performance premium battery technology.

This strategic shift is seen as an attempt by the Korean battery industry to increase efficiency by focusing on specific areas and secure future growth engines. As the ESS market is expected to grow rapidly with the expansion of renewable energy, attention is focused on whether this will become a new opportunity for Korean battery companies.

As the block economies of the United States and China deepen, South Korea is grappling with its diplomatic and economic strategies. Some experts argue that Korea should, whether it likes it or not, or because it benefits national interests, naturally be incorporated into the U.S. bloc. This perspective views America's thorough containment policy against China as an opportunity for Korea.

However, others argue that relations with China cannot be neglected either. They contend that there is no reason for relations between Korea and China to deteriorate, and that relations with China should be handled flexibly, just as relations with President Trump are managed. This viewpoint advocates for Korea to maximize its national interests through balanced diplomacy between the U.S. and China. Ultimately, Korea finds itself in a complex situation where it must make wise choices between two giant economic blocs.

Amidst a recent decline in department store stock prices, it has been pointed out that the cause was not actual poor performance but rather analysts' excessive expectations. Department store companies showed good performance in terms of numbers, recording a 120% increase in profit compared to the previous year. Nevertheless, the stock price decline is attributed to abnormally high market expectations.

Typically, in a normal market, the disparity between analysts' consensus (market expectations) and actual corporate performance does not diverge so greatly. However, it is suggested that retail analysts may have set excessively high performance estimates during periods of rising stock prices or in inexplicable market situations. There is criticism that they failed to adjust the consensus to a reasonable level over time.

In conclusion, the analysis suggests that the recent department store stock price decline was more influenced by analyst reports that failed to properly manage market expectations, rather than a problem with corporate performance. In other words, despite an increase in company profits, the stock price fell because it could not meet the market's excessively high expectations.

Critic Park Si-dong strongly pointed out problems with analyst reports regarding the recent halving of department store stock prices. He argued that while semiconductor or artificial intelligence (AI) related stocks may show volatility linked to global trends, companies like department stores, which have solid domestic-based performance, should have fallen less or even held their ground in such volatile markets.

However, the fact that department store stock prices have halved clearly indicates that 'something is wrong.' Park analyzed that this phenomenon occurred because analysts failed to communicate effectively with the market and maintained excessively high performance consensuses. In other words, despite the company's actual cash flow and performance not being bad, the stock price fell significantly due to unrealistic market expectations. This raises fundamental questions about the reliability of analyst reports and their market prediction function.