Financial Authorities Launch First Official 'Value-Up' Promotion to Overseas Institutional Investors

Financial Supervisory Service Chief Lee Bok-hyun's Third Event Under 'K-Finance Sales' Motto Following Singapore-London IR
Vice Chairman Kim So-young Leads Accompaniment of Exchange and Depository Headquarters Chiefs
Discussion on Abolishing Financial Transaction Tax and Short Selling System

The financial authorities will hold a session to introduce the 'Corporate Value-Up Program,' designed to resolve the Korea Discount (undervaluation of Korean stocks), to overseas institutional investors for the first time. This comes as investors are increasingly turning away from the sluggish Korean stock market and directing their investments overseas, including Japan. The government plans to explain the improved financial environment, including the value-up program for attracting institutional investors, the abolition of the financial investment income tax, and the current status of Korea's short-selling system, in Singapore, where many overseas institutional investors have their headquarters.

Kim So-young, Vice Chairman of the Financial Services Commission, is delivering opening remarks at the "Domestic ESG Disclosure Standards On-site Meeting" held on the 14th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

According to the financial authorities on the 20th, Deputy Chairperson Kim So-young will visit Singapore and Thailand from the 26th to the 29th for a 3-night, 4-day schedule to meet with overseas institutional investors. Only senior officials from the Korea Exchange and the Korea Securities Depository will accompany the trip to Singapore. This is the third event under the motto of 'K-Finance Sales,' following last year's joint overseas investor relations (IR) sessions led by Financial Supervisory Service Chairman Lee Bok-hyun in Singapore and London.

First, in Singapore, a roundtable will be held targeting major overseas institutional investors. Led by Deputy Chairperson Kim So-young, the financial authorities are expected to actively promote the Corporate Value-Up Program to overseas institutional investors visiting Singapore, where institutions such as Goldman Sachs have their headquarters. The 26th is also the day the government will announce the specific implementation plan for the Corporate Value-Up Program. Previously, the government announced the introduction of the Corporate Value-Up Program, modeled after Japan's stock market stimulus measures, to resolve the chronic Korea Discount issue.

This visit is part of the ongoing efforts following President Yoon Suk-yeol's statement to "resolve the Korea Discount." Since the low proportion of institutional investors is considered a major cause of the domestic stock market's undervaluation, the government aims to actively promote the improved or upcoming domestic investment environment to attract overseas institutional investors.

A financial authority official explained, "This is the first official occasion where the government introduces the Corporate Value-Up Program to overseas institutional investors," adding, "The purpose is to explain the systems being promoted to improve the domestic stock market environment and to actively attract overseas institutional investors."

In addition to the value-up program, the abolition of the financial investment income tax and the short-selling system are expected to be key topics. The government has officially announced the abolition of the financial investment income tax, arguing that imposing full taxation on capital gains from stocks negatively affects the attractiveness of the Korean stock market amid the Korea Discount. Although foreign investors and institutional investors are not subject to this tax, the financial authorities cite this as an example of improving the trading environment for individual investors, emphasizing that this could create a virtuous cycle of attracting more investors to the stock market and helping to resolve undervaluation.

The short-selling system will also be addressed. Deputy Chairperson Kim plans to introduce the tasks for improving the short-selling system to enhance capital market accessibility for domestic and foreign investors. This appears to be a conciliatory move, as overseas market participants and foreign investors are not favorable toward Korea's short-selling ban.

In Thailand, Deputy Chairperson Kim will meet with Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BOT), and Ruenbat Suwanmongkol, Chairman of the Thai Securities and Exchange Commission (SEC). During this meeting, they plan to discuss the difficulties faced by Korean financial companies operating in Thailand and request cooperation.