A pathway to stability
The long-awaited impeachment trial verdict in Korea is due the day after this newsletter goes to press. ... more
Korea reform
Korea’s government and main opposition party continue to push their respective stock market and corporate governance reform agendas. The vice-chairman of the Financial Services Commission (FSC) appeared at several conferences in February to highlight the government’s continued commitment to “Value-up”. On one measure – share buybacks – Value-up is already proving to be a success, with Korean companies increasing buybacks by 72.8% year-on-year to $9.8 billion in 2024. However, both the FSC and Korea Exchange want to boost the number of listed firms releasing general Value-up plans beyond the current 114. ... more
Korea stewardship code
In line with our continued commitment to the Asian markets and our dedication to fulfilling our stewardship responsibilities, we have initiated the process of registering Metrica as a participant in the Korea Stewardship Code. ... more
Value-up index announced
Korea Exchange released the details of its long-awaited Korea Value-up index.
As expected, not one non-financial holding company was included in the index, although many listed subsidiaries were. This was not a surprise to us, as we have not seen wholehearted participation in Corporate Value-up (CVU) by any of the nonfinancial holding companies with the exception of LG Corp. We expect this to change over time following pressure by investors, regulators and the stock exchange. ... more
Gentle persuasion
Korea continues to be a key focus. Foreign investors are still generally quite sceptical on the prospects for the Value-up programme, with fewer than 30% expecting it to have a meaningful impact Principal reasons are the perceived inability of the government to pass legislation due to its minority position combined with the structural impediment of an equity market dominated by majority shareholders that seemingly don’t care about share prices. ... more
Round trip, complete
It is rare to see a prominent investment theme go from zero to one hundred and back to zero again in the space of a few months. However, that is the story of Korea’s “Corporate Value Up” (CVU) initiative in 2024. ... more
A large retracement
Investors are less optimistic about the Korea Corporate Value-up program: ... more
Corporate Value-up
The Financial Services Commission (FSC) in Korea recently released the “Corporate Value-up Program”. Some highlights: ... more
One in a thousand
Unsolicited and / or hostile tender offers are rare in Asia-Pacific and particularly so in Korea - it ties with China in having the lowest proportion of such transactions (around one in a thousand according to Bloomberg); Australia by contrast has the highest with 12.8% (figure below). ... more