Big-name global investors eye Korea’s Corporate Value-up Program
Representatives of multiple international financial firms are scheduled to visit Korea this week, as interest grows in the government’s recent launch of an initiative called the Corporate Value-up Program that aims to bolster the domestic stock market and attract more investments from overseas.
According to financial sources, Sunday, the Seoul trip will be organized by the Asian Corporate Governance Association (ACGA), a non-profit organization headquartered in Hong Kong.
Participating companies will include All Pension Group (APG), Elliott Investment Management, Federated Hermes, Goldman Sachs, JP Morgan, Norges Bank Investment Management (NBIM), Palliser Capital and Oasis Management.
The delegates are scheduled to visit the Korea Exchange (KRX), the country’s sole bourse operator, as well as other related firms and financial institutions.
The companies are among 101 members of the ACGA from 18 countries and regions, including Korea, the United States, Canada, France, and Luxembourg. Other members include the Netherlands, Norway, Sweden, the United Kingdom, Australia, China, Hong Kong, Japan, Malaysia, the Philippines, Singapore, Taiwan and Vietnam.
The member companies’ business portfolios encompass a wide spectrum, spanning from accounting and auditing to hedge funds, investment banking, pension funds, and sovereign wealth funds.
The ACGA has been organizing the Korea visit every year, under its mission of implementing effective corporate governance practices throughout Asia and exploring investment opportunities in the region.
“Under the circumstances, the 2024 trip is believed to be more significant because its purpose is exactly in line with the goal of the Corporate Value-up Program,” a KRX official said.
The Corporate Value-up Program, unveiled by the Financial Services Commission (FSC) on Feb. 26, aims to elevate the self-assessment standards of listed companies in Korea and enhance their corporate governance practices.
A lack of transparency in corporate governance has been cited as a significant factor contributing to the lower valuation of listed companies in Korea compared to their global counterparts.
Korea ranked eighth out of 12 Asian countries in corporate governance according to a 2023 survey conducted by the ACGA. Korea moved up one notch from the previous survey. However, the rate of improvement in that area has been slower compared to Japan, which climbed three spots to secure the No. 2 position.
Although it is still debated, the program is “regarded as being right on track to boost the undervalued stocks and draw more interest from offshore investors,” a KRX official said.
He highlighted the fact that the share of foreign-owned stocks out of total market capitalization in the benchmark KOSPI index reached the highest level in 26 months as of Thursday.
Foreign investors own 764.5 trillion won ($567.9 billion) worth of stocks traded on the KOSPI.
The shares account for 34.07 percent of a total KOSPI market cap of 2,244.16 trillion won.
A public relations staff member of a KOSPI-listed company expressed hope that the ACGA-organized trip “may prompt interest from non-ACGA members on the Korean market in the long term.”