An inflatable bull during a ceremony marking the first day of trading of the year at the Korea Exchange (KRX) headquarters in Seoul, South Korea, Tuesday, Jan. 2, 2024.
SeongJoon Cho/Bloomberg via Getty Images Bloomberg | Bloomberg | Getty ImagesSouth Korea's Japan-style measures for improving corporate governance may not be enough to boost its undervalued stock markets and tackle the so-called "Korea discount."
Asia's fourth-largest economy is striving to boost stock market valuations that are considered much lower compared to peers, with analysts referring to the phenomenon as the "Korea discount."
The 'chaebol' problemSouth Korean markets are made up of corporations called "chaebols," which are large family-owned global conglomerates, typically controlled by the founder's family.
"The behavior that leads to South Korea's low stock prices is motivated, and therefore seeking to coax South Korean controlling families into 'being nice' to minority stockholders is unlikely to be successful," Pines said.
Persons:
SeongJoon Cho, James Lim, Jonathan Pines, Federated Hermes, Daniel Tan
Organizations:
Korea Exchange, Bloomberg, Getty Images Bloomberg, Getty, Financial, FSC, Samsung Electronics, LG, SK, Hyundai, Dalton Investments, Japan, Korean Stock Exchange, Federated, Grasshopper Asset Management, CNBC
Locations:
Seoul, South Korea, Japan, Korea, Tokyo, Asia, Singapore