As foreign investors continue to sell off domestic stocks, Bae Jae-kyu, CEO of Korea Investment Trust Management, proposed investing surplus tax revenue generated from the semiconductor boom into the domestic stock market to stabilize it and build assets for future generations. His suggestion aims to convert temporary tax increases into long-term investment assets.
On November 11, Bae wrote on his social media, "With the stock market's volatility increasing, isn't it time to establish a market stabilization fund?" He suggested a plan that combines discussions on the government's future growth fund with stock market stabilization measures.
Foreign investors have been net sellers of domestic stocks for seven consecutive months, and from November 2 to 6, they sold over 10 trillion won in the securities market. On November 5 alone, they net sold approximately 3.4 trillion won, causing the KOSPI to drop more than 5%. There are calls for an expanded role of public funds in a situation where stable long-term buyers are lacking.
Bae estimated that the surplus tax revenue from 2026 to 2028 could amount to 275.8 trillion won. He proposed distributing this amount proportionally across the total market capitalization of listed common stocks in the domestic securities market and KOSDAQ.
He also suggested securing the acquisition cost of stocks allocated to children in Korea first, with remaining funds and operational profits invested in indices such as the MSCI World Index and Emerging Markets Index. However, the 275.8 trillion won figure is an estimate based on various assumptions and not confirmed actual funds.
The plan also includes asset allocation for future generations. By the end of 2026, stocks would be allocated to children and teenagers aged 0 to 19 based on age, and newborns after 2027 would receive stock rights valued at 50 million won per person. Beneficiaries would be able to withdraw part or all of their assets starting at age 30.
Bae estimated that if an average annual total return of 5% continues for 30 years, 50 million won could grow to approximately 216.1 million won. He explained, "That child would not just inherit money but gain the opportunity to participate in the growth of a capitalist economy."
However, challenges such as price distortion from large-scale public fund stock purchases, concentration of voting rights, investment losses, and intergenerational equity were noted. Bae acknowledged, "To implement this in reality, we must address numerous challenges, including securing funds, legal and tax issues, intergenerational equity, the impact on the stock market, the independence of fund management, and individual asset management and payment systems."
He emphasized the intent behind his proposal, stating, "I hope our country can choose to leave some of the wealth generated unexpectedly for future generations instead of using it all now."
* This article has been translated by AI.
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