(LEAD) Lee pledges capital market reform to address stock undervaluation

SEOUL, Nov. 13 (Yonhap) -- President Lee Jae Myung reaffirmed his dedication to capital market reform during a policy discussion at the Korea Exchange on Friday, aiming to tackle what he described as the undervaluation of South Korean stocks. Lee emphasized the need to bolster market confidence through institutional changes and the crackdown on irregularities. He described the undervaluation as an "unreasonable abnormality," underscoring his administration's ongoing commitment to financial market reform.

The president noted that investor confidence is paramount for a robust capital market, vowing to restore it by addressing unfair trading practices and market irregularities. Concerns about potential geopolitical crises along the ceasefire line were highlighted by Lee, stressing that removing such worries and restoring trust is of utmost importance. While the government has introduced reforms to combat unfair practices and abuses by major shareholders, Lee acknowledged that significant progress remains to be made.

The government is actively responding to unfair practices like stock price manipulation on a nationwide level, with an investigative body tasked with cracking down on irregularities. Lee called for measures to facilitate mergers and acquisitions, arguing that frequent corporate takeovers could expand the market and contribute to normalizing stock prices.

He emphasized that hostile M&As could be the most effective tool for achieving this goal. Additionally, Lee advocated for the creation of a high-level body to oversee capital market reforms, recognizing the extensive work that still needs to be accomplished.