Kim So-young, vice chair of the Financial Services Commission, noted on the 8th that "150 corporations, accounting for about 50% of the market capitalization of listed companies in the Korea Securities Market, are participating in disclosures aimed at enhancing corporate value (value-up)" and said, "Value-up disclosure corporations are showing higher stock price increases compared to the market average."
Vice Chair Kim attended the seminar titled "Capital market advancement policy results and future tasks" held at the Korea Exchange in Yeouido, Seoul, where she served as a keynote speaker and made these remarks. The seminar was held to review the advancement policies of the capital market so far and to discuss the development direction in the capital market sector from a mid- to long-term perspective.
Vice Chair Kim said, "The government is pursuing various efforts to advance the capital market to become a 'ladder of coexistence and opportunities' for the public and corporations, and as a result, some achievements are being realized."
She emphasized that there have been achievements such as the abolition of the foreign investor registration system, enhanced accessibility to the foreign exchange market, expansion of English disclosures, and improvements to the dividend system, leading to inclusion in the global advanced index, the World Government Bond Index (WGBI). She assessed that the transaction has been gradually expanding since the launch of the alternative trading system (ATS), NextTrade, in March of this year, and that a multiple market structure is also being established.
She also mentioned that as the corporate value-up program spreads, cash dividends and share buybacks and cancellations of listed companies have increased. Cash dividends rose from 29.5 trillion won in 2023 to 32.66 trillion won last year, an increase of 10.7%, and the average dividend yield recorded its highest level in the past five years. The size of share buybacks and cancellations was also counted at 22.9 trillion won from the second quarter of last year to 19.6 trillion won in the first quarter of this year, showing increases of 141.7% and 126.7% respectively compared to the previous year.
Vice Chair Kim evaluated that "In order to strengthen the protection of investors' rights, comprehensive institutional improvements have been made, including improvements to the physical division system, pre-disclosure of insider transactions, improvements to convertible bonds and share buyback systems, and improvements to mergers and acquisitions (M&A) systems, while efforts for shareholder communication and protection are also expanding during the corporate governance restructuring process."
He explained that as a result of improving the system so that common shareholders can know in advance about dividends, in the previous month, 1,138 out of 2,450 listed companies, or 46.4%, and 165 companies out of 750 that introduced quarterly dividends revised their articles according to the improved procedures. The improvement in the delisting system announced in January will be implemented progressively starting in July.
Vice Chair Kim said that "Strengthened disclosures for investors, improvements in corporate accounting and audit governance, among other things, will see the institutional improvement measures applied starting in the second half of this year," adding, "We are working on enhancing the competitiveness of financial corporations in the securities sector that strengthens the innovation and capabilities of the capital market, institutionalization of token securities (STO) fractional investment platforms, and revitalization of the trust industry."
Vice Chair Kim pointed out that the performance of corporations is being constrained by declining potential growth rates due to changes in demographics, and the spread of risk-averse sentiment amid recent economic and political uncertainties. He emphasized that "These limitations have the potential to be sufficiently improved if the situation improves" and said that "Efforts to advance the capital market need to be pursued in the long term to completely resolve the Korea discount phenomenon (undervaluation of the Korean stock market) and to enter a truly advanced capital market."
On the topic of "corporate value enhancement and strengthening trust in the capital market," Kang So-hyun, director of the Capital Market Research Institute, emphasized the necessity for qualitative growth of the listing market and advancement of the multiple market system in order to proactively respond to the structural changes in the domestic capital market.
He pointed out that "Improvements in institutional aspects from the investor's perspective, such as market accessibility and information provision, have been made, and voluntary disclosures to enhance corporate value have led to shareholder returns and strengthened investor communication, creating a positive trend." He continued, "Through the institutionalization of alternative trading markets and unlisted stock distribution platforms, the market structure has been supplemented, and for future recovery of market trust and activation of investments, it is necessary to continue institutional improvements and achieve harmonious cooperation and consensus between policies and markets."
Professor Kim Yoo-sung from Yonsei University Law School, presenting on the topic of "Improvements in regulations on unfair trading and future challenges," said, "Trust of investors in the strict enforcement of laws by financial authorities must be established to resolve the Korea discount issue," and evaluated that "Regulations on unfair trading have been greatly improved over the past three years for the advancement of the capital market."
Professor Kim suggested the need for the establishment of a system to prevent unfair trading through swift and strict sanctions, considering the growth rate of the capital market, as a future challenge.