Key Takeaways
- • Seoul Mayor Oh Se-hoon accused the Lee Jae-myung administration of fostering a speculative market ahead of the local elections by raising the National Pension Service's domestic stock target ratio and permitting high-risk leveraged products.
- • The National Pension Service's Fund Management Committee decided on May 28 to raise its domestic stock target ratio from 14.9% to 20.8%, effective at the end of June when the rebalancing grace period ended.
- • Oh demanded that President Lee Jae-myung apologize for losses suffered by individual investors following a recent stock market decline and called for measures to manage the situation.
- • Oh also demanded disclosure of the identities of those who made the pension allocation decision and the reasoning behind it, noting the decision came six days before the local elections.
Summary
Seoul Mayor Oh Se-hoon has publicly blamed the Lee Jae-myung administration for creating a speculative atmosphere in the domestic stock market ahead of local elections, linking the policy to a recent stock market crash. In a social media post on the 8th titled "Stock gambling for local elections, stop evading responsibility," Oh argued that stock prices rose significantly before the elections and fell sharply afterward, asking, "Is this all just a coincidence?" He demanded that President Lee apologize for losses suffered by individual investors and provide measures to manage the situation.
Oh's central criticism concerns the National Pension Service (NPS). The Fund Management Committee of the NPS decided on May 28 to increase the domestic stock target ratio from 14.9% to 20.8%, applied from the end of June when the rebalancing grace period ended. According to the article, the Ministry of Health and Welfare and the committee cited the gap between actual and target domestic stock allocations, long-term profitability and stability, possible structural changes in the domestic stock market, and management adjustments to reduce market impact as the rationale. The committee also decided to maintain the 20.8% target for 2027 and established operational rules to reduce the daily rebalancing scale to mitigate market impact.
Oh contends that the decision, made six days before the local elections, positioned the NPS as a source of support for the stock market. He further argued that the government used high-risk leveraged products to expand market investment scale, and that it raised expectations for stock price growth, prompting middle-aged citizens to invest retirement funds and younger citizens to commit marriage and housing savings to equities. He demanded disclosure of who made the decision and the reasoning behind it.
Oh's central criticism concerns the National Pension Service (NPS). The Fund Management Committee of the NPS decided on May 28 to increase the domestic stock target ratio from 14.9% to 20.8%, applied from the end of June when the rebalancing grace period ended. According to the article, the Ministry of Health and Welfare and the committee cited the gap between actual and target domestic stock allocations, long-term profitability and stability, possible structural changes in the domestic stock market, and management adjustments to reduce market impact as the rationale. The committee also decided to maintain the 20.8% target for 2027 and established operational rules to reduce the daily rebalancing scale to mitigate market impact.
Oh contends that the decision, made six days before the local elections, positioned the NPS as a source of support for the stock market. He further argued that the government used high-risk leveraged products to expand market investment scale, and that it raised expectations for stock price growth, prompting middle-aged citizens to invest retirement funds and younger citizens to commit marriage and housing savings to equities. He demanded disclosure of who made the decision and the reasoning behind it.
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