Korean Economic News: Investment Trends and Political Impacts

The Korean economic landscape is shifting as investment strategies evolve amidst political uncertainty and changing regulations.

### Morning Routine: Korean Economic News Highlights
The front-page photo features the Bank of Korea transporting cash for Chuseok, with articles on **gold investment** and **retirement funds**. U.S. presidential election news reveals Harris's changing stance on **electric vehicle mandates**, while Trump plans to **abolish related tax benefits**. Additionally, empty stores and a surge in **credit loans** due to **mortgage loan blockages** are reported.

### Shifting Trends in Mortgage and Credit Loans
Banks are raising the threshold for mortgage loans, causing a shift towards credit loans, leading to **additional measures to curb their surge**. KB Kookmin Bank is now limiting credit loan amounts to **annual income**, a change from providing loans of **up to 130% of annual income**. Meanwhile, Seoul's housing prices have risen for **24 consecutive weeks**, with a slight decline in the rate of increase, while rental prices for one-room apartments near universities are also on the rise, adding to the **financial burden for college students**.

### Ongoing Debate Over Financial Investment Tax Abolition
The People Power Party is pressuring the Democratic Party to **abolish the financial investment tax**, while the Democratic Party is suggesting a **revision instead**. Representative Lim Kwang-hyun's proposal includes **raising the basic deduction**, **expanding the investment limit**, and **lifting the restriction on overseas stock investments** through ISA accounts. The financial investment sector's reaction is negative, with concerns that the tax exemption for overseas investments could **diminish the incentive to invest in domestic stocks**.

### Entry Regulations and Taxation for ETFs
Entry regulations for investing in ETFs include a **deposit and online training**, but these do not apply to high-risk overseas-listed ETFs. Domestic ETFs are subject to a **15.4% capital gains tax**, with comprehensive taxation on financial income for earnings over **20 million won**, while overseas-listed ETFs offer tax exemption for income up to **2.5 million won** and a **22% separate taxation on capital gains** for amounts exceeding that. The KOSPI and KOSDAQ indices have recently declined, with Samsung Electronics facing a **significant drop in stock price**, while target conversion funds are gaining traction in the public fund market, offering **short-term investment opportunities** for investors.

### The Launch of Target Conversion Funds and SCHD's Popularity
Target conversion funds are being launched in response to a stable stock market, but their success is now **uncertain due to increased volatility**. These funds are promoted as **mid-risk, mid-return options**, aiming for **5-7% returns**, but their portfolios are similar to regular funds. Meanwhile, SCHD, the Schwab U.S. Dividend Equity ETF, is gaining popularity among domestic investors, with Koreans accounting for **14% of the total net investment this year**, despite its underwhelming performance compared to the S&P 500.

### Long-Term Investment Strategies and Stock Market Update
Long-term investment attractiveness may decline, making it beneficial for younger individuals to invest in **index ETFs like the S&P 500**. The New York stock market had a volatile day, with mixed results from the major indices and conflicting economic indicators. Key tech companies like **Amazon and Tesla saw significant gains**, while pharmaceutical stocks struggled, and OPEC announced an **extension of production cuts**.

### Berkshire Hathaway's Stock Performance and Retirement Pension Transfers
Berkshire Hathaway's stock prices have risen **over 30% this year**, despite concerns about their high level compared to corporate performance. The company is reducing its stock buybacks, with a **significant drop in the second quarter**. Starting October 15, a new system for physical transfers of retirement pension accounts will be implemented, making it **easier to switch companies without liquidating products**.

### Subscription Issues and Investment Fund Legislation
The speaker subscribed to a newspaper for their child's education but is facing **delivery issues**. The discussion includes a **controversial article** about Warren Buffett's Berkshire Hathaway and the recent selling of **target conversion funds** by banks. The speaker also introduces legislation related to investment funds, expressing concerns about its **impact on the Korean stock market** and the **need for new revenue sources**.

### Current Economic Trends and Political Impacts on Investment Strategies
* 📰 Today, we kick off our morning routine with the Korean Economic Newspaper, highlighting the Bank of Korea's preparations for Chuseok, particularly the **transportation of 50,000 won bills**.
* 📈 The front page features an article on **gold investments**, alongside information about **funds, ETFs, and retirement pensions**, which we will discuss later in the broadcast.
* 🇺🇸 In U.S. presidential election news, Vice President Harris has shifted her stance on mandatory electric vehicles, while Trump threatens to **abolish electric vehicle tax benefits** if re-elected, indicating a **potential retreat from current EV support policies**.
* 🚗 European automotive companies like Volvo are reconsidering their electrification strategies due to **market uncertainties**, while Hyundai plans to **increase its hybrid car offerings** in response to these changes.
* 🏠 In South Korea, a surge in credit loans by **500 billion won** occurred in just three days due to tightened mortgage lending, prompting banks to impose **stricter loan limits based on annual income**.
* 🏡 Seoul's housing prices continue to rise, recording a **0.21% increase**, with rental prices for one-room apartments averaging **680,000 won**, highlighting ongoing concerns about **affordability for students**.
* 💰 The financial investment income tax remains a contentious topic, with **60% of viewers** in a recent survey favoring its removal, reflecting **widespread anxiety over stock investments** amidst political uncertainty.
* 📊 As we wrap up, remember to review your retirement pension options as a new transfer system will **simplify the process starting October 15**, allowing for **physical transfers without liquidating assets**.

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