South Korea Authorities Urge Companies to Increase Their Valuations

Photo:Freepik

On February 26th, South Korea's financial regulator announced that they would be making some changes to improve the value of their stock market. They want to encourage companies listed on the stock market to increase the money they pay back to their investors, which will help increase the value of South Korean companies overall. This is similar to what Japan did to improve its own stock market.

To make this happen, the Financial Services Commission (FSC) will create a list of companies that are doing well and have high value for their investors.

They will also look into ways of giving tax breaks to companies that increase their value and pay more money back to their investors. The FSC believes that these steps will help fix the issue of South Korean companies being valued lower than other companies from around the world.

This issue is called the "Korea discount," which means that South Korean companies are valued lower than other companies because they don't pay as much money back to their investors and are often run by big, complicated groups of companies called chaebols.

A chaebol is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates controlled by a person or group. Several dozen large South Korean family-controlled corporate groups fall under this definition.