(Seoul=Yonhap Infomax) Young Tae Seo—The Korea Capital Market Institute and the Korean Derivatives Association held a policy symposium under the theme "Policy Tasks for the Era of Sustainable Korea Premium."


At the event, held at the Korea Financial Investment Association on the morning of the 21st, Min Ki Kim and Sang Ho Lee, research fellows at the Korea Capital Market Institute, compared equity market discount rates internationally and analyzed the structural factors behind the so-called "Korea Discount."


Professor Soo Bok Wang of Ajou University presented Taiwan's policies for enhancing corporate value, offering key implications for South Korea. Hyun Young Hwang, research fellow at the Korea Capital Market Institute, proposed improvements to corporate governance through strengthened shareholder rights.


The symposium reaffirmed that the "Korea Discount" is a multifaceted phenomenon. Kim and Lee estimated the implied discount rates of equity markets in 59 countries and examined the structural discount factors in the Korean market. Historically, South Korea's equity market discount rate has been higher than those of major economies, while total shareholder returns and return on equity (ROE) have been lower. "These international gaps are the result of a complex interplay of financial performance, shareholder returns, innovation, governance, and institutional factors," said Kim.


There were also calls for South Korea to adopt policies similar to those of Taiwan. Professor Wang stated, "South Korea should, like Taiwan, support innovation investment and improve disclosure for growth companies focused on intangible assets. Strengthening investor relations (IR) over the medium to long term should also be pursued." Wang analyzed that Taiwan's efforts to enhance board independence, establish stewardship codes, and secure growth engines centered on technology and semiconductors have effectively boosted corporate value.


Research fellow Hwang emphasized the importance of general shareholders' meetings. Hwang advocated for a system requiring disclosure of meeting materials three weeks in advance, as well as dividend announcements and guaranteed shareholder proposal rights six weeks prior to the meeting. Hwang also noted, "Substantive improvements are needed, such as specifying executive compensation resolutions and disclosures, and establishing measures to monitor stewardship code implementation."


ytseo@yna.co.kr

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