Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, announced this during a press conference at the Government Sejong Center on May 11. The shares were sold at 555,800 won each, exceeding the book value of 553,400 won per share, reducing the government's stake from 30.6% to 25.7%.
Previously, the government attempted to sell the shares through public bidding and the selection of a sale manager after receiving them from NXC in 2023, but repeated failures occurred due to the large scale of 4.7 trillion won.
NXC has initiated a stock buyback based on investment returns from domestic and international corporations. This sale marks the first instance of asset disposal exceeding 30 billion won since the government improved its asset sale system last December, completing the necessary procedures including meetings of the National Property Policy Review Committee, cabinet approval, and reporting to the National Assembly.
Koo stated, "Although the government had tried to sell the shares until last year without success, this time, Nexon purchased the shares with foreign currency. We view this positively as the sale price exceeds the book value we received."
The Ministry of Economy and Finance expects this sale to have several benefits, including an influx of foreign currency and securing non-tax revenue. By utilizing some of the foreign currency funds for the buyback, the government aims to contribute to currency stability.
Additionally, the successful sale of previously stagnant shares is expected to contribute to fiscal management. The government plans to include the 1 trillion won from the NXC share sale in this year's non-tax revenue budget.
Meanwhile, due to recent amendments to the Commercial Act mandating the retirement of treasury shares, NXC is expected to retire the shares it has purchased.
Koo also mentioned that the government is working on legislation related to the 'Korean version of the sovereign wealth fund,' which would address the transfer of the NXC shares to the fund. Under current law, proceeds from the sale of Nexon shares cannot be transferred to the sovereign wealth fund.
He added, "If a sovereign wealth fund is established, we could place the shares received into the fund, allowing it to determine the timing and method of sale to maximize profits. I believe that if the fund is established quickly, it could greatly benefit the nation."
The government has assessed that the inclusion in the World Government Bond Index (WGBI) has positively impacted the foreign exchange market, leading to a significant influx of foreign capital, primarily from Japanese investors, into the domestic bond market.
From March 30 to May 8, foreign investors purchased a total of 14.6 trillion won in government bonds based on transaction standards, with net purchases amounting to approximately 10 trillion won.
The government analyzed that the WGBI inclusion is expanding the investor base in the medium to long term, improving the supply and demand conditions in the bond market. It also expects that the stability of the South Korean economy, policy reliability, and the level of financial market development will enhance the country's credibility internationally.
In particular, the influx of new foreign capital is anticipated to lower government bond yields and reduce corporate financing costs, positively affecting the real economy and encouraging investment.
The government also noted that the WGBI inclusion, along with the new framework for the National Pension Service and the introduction of domestic stock return accounts (RIA), is contributing to the stability of foreign exchange supply and demand. Following the announcement of the National Pension Service's new framework on April 14, expectations for expanded currency hedging have alleviated speculative dollar buying in the offshore market.
Amid a favorable domestic capital market, the number of RIA accounts and the amount deposited are rapidly increasing. As of May 8, the number of RIA accounts reached 212,000, with deposits exceeding 1.6 trillion won. The government anticipates continued capital inflows, as investors can receive a 100% tax exemption on capital gains from the sale of overseas stocks until the end of this month.
* This article has been translated by AI.
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