Government Continues Momentum of 'Value-Up Policy'... Academic Community Also Provides Support

Policy Symposium Followed by Academic Seminar Focused on 'Value Up'
Emphasis on Resolving Korea Discount and Enhancing Intrinsic Value

To sustain the momentum of the government's corporate value-up policy, academia has also stepped in to provide support.

According to the financial investment industry on the 1st, the Korea Securities Association will hold its first academic seminar this month on the 9th at the headquarters of Korea Growth Investment Corporation (Korea Growth Finance) in Yeouido, Seoul, under the theme "Korea Discount (Undervaluation of the Korean Stock Market) and an Academic Review of Value-Up." Professors Woojin Kim of Seoul National University and Subong Wang of Ajou University are scheduled to present their research at this seminar. Typically, academic seminars are held 3 to 4 times a year focusing on the most important current issues in the capital market.

In March, the Securities Association also held a policy symposium on the theme "Challenges for Successful Corporate Value-Up." At that event, So-Young Kim, Vice Chairman of the Financial Services Commission, and Eun-Bo Jung, Chairman of the Korea Exchange, attended in person to deliver congratulatory remarks. Vice Chairman Kim stated, "The success of the corporate value-up program cannot be achieved by the government and related institutions alone," urging the interest and encouragement of companies, the financial investment industry, and experts. Vice Chairman Kim herself is an academic, having served as a professor in the Department of Economics at Seoul National University before her appointment.

Academia evaluates that the value-up program has succeeded in initially attracting the interest of foreign investors. According to the Korea Exchange, foreigners have net purchased about 18.53 trillion KRW worth of stocks over approximately four months from the beginning of the year until the 29th. In the first quarter, net purchases amounted to 15.8 trillion KRW, the highest since related statistics began in 1998.

The issue is that it is necessary to attract long-term investment rather than just a temporary interest from foreign investors. It is pointed out that measures should be prepared focusing on fundamentally enhancing corporate value beyond resolving the discount. Ultimately, discussions on improving governance, regulatory reform, and the role of the board of directors within companies are needed.

Professor Kwanhwi Lee of Seoul National University, who delivered the keynote speech at the March policy symposium, said, "The reason for the Korea discount is not simply insufficient shareholder returns or low profitability, but is comprehensively intertwined with governance issues and various systems (taxes, regulations) that hinder market efficiency." He emphasized, "Therefore, the goal of the value-up program should not be short-term stock price boosting but ultimately improving corporate fundamentals, with regulatory reform and especially the role of the board of directors being key."

Professor Junseo Lee of Dongguk University, who serves as the president of the Korea Securities Association, said, "Value-up fundamentally consists of resolving the discount and enhancing intrinsic value," adding, "We need to seek fundamental solutions from three perspectives: governance issues, insufficient shareholder returns, and low growth indicators such as return on equity (ROE)." He further emphasized, "The financial authorities have proposed incentive-based measures rather than penalties, and ultimately, execution depends on companies and investors," stressing that "they should play a pioneering role."

Meanwhile, the "Corporate Value-Up Advisory Group," led by the Financial Services Commission, Financial Supervisory Service, major pension funds, and the Korea Exchange, is chaired by Professor Myunghyun Cho of Korea University. Chairman Cho previously served as the head of the Korea Corporate Governance Service (now Korea ESG Standards Institute). The advisory group is developing a Korean-style index that will serve as the underlying asset for the value-up exchange-traded fund (ETF) while coordinating proposals through communication with listed companies. The finalized guidelines are scheduled to be announced at the Korea Exchange's second seminar in May.

This content was produced with the assistance of AI translation services.