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Bourse to get 6 tril. won in policy funds

Posted April. 04, 2001 18:24,   


The Financial Policy Council adopted a package of measures Wednesday aimed at boosting the sagging stock market. The package includes plans to inject 6 trillion won worth of pension and other policy funds by the end of this year and impose no taxes on dividends earned from stocks held for more than a year. The initiative came in a meeting held at the Korean Federation of Banks in downtown Seoul that was attended by Kim Jin-Pyo, vice minister of Finance and Economy Ministry; Yu Ji-Chang, vice chairman of the Financial Supervisory Commission; and Park Cheul, vice governor of the Bank of Korea.

A system will be introduced in the second half of this year to allow listed firms to offer dividends quarterly instead of yearly and to grant more flexibility in the issuance of public, currency stabilization and other bonds.

To boost the stock market, a total of six trillion won worth of pension and other policy funds will be mobilized. The government plans to increase the funds for stock investment by 800 billion won and invest three trillion won in the first half of this year. The government also decided to form a three trillion won stock investment pool from small and medium-sized funds.

The council also agreed to recommend revising laws such that corporate taxes of 50 percent on proceeds from stock transactions would not be levied on capital gains from stocks sold by pension and other funds. It also agreed to wipe out regulations that complicate stock investments.

Lee Na-Yeon larosa@donga.com