Park Moon-gyu, New York Economic Counselor: "Value-up Overseas Investor Interest Encouraging"

Meeting in New York, USA

Park Moon-gyu, Deputy Consul General and New York Financial and Economic Officer (Finance Officer), stated, "Interest from overseas investors in the Korea Value-Up Program has encouragingly increased," adding, "We share a common awareness of the issue of the Korea Discount (the phenomenon where Korean companies' stock prices are lower compared to similar foreign companies' stock prices)."

Park Moon-gyu, Deputy Consul General and New York Financial and Economic Officer, is speaking at a press conference held in New York, USA, on the 20th (local time). Photo by Ministry of Economy and Finance

At a press briefing held in New York on the 20th (local time), Deputy Finance Officer Park said, "Interest from overseas investors in the value-up project promoted by the Korean government has increased," and "Since the government announced the Value-Up Program last February, the Ministry of Economy and Finance has been continuously promoting it through IR schedules." The briefing was also attended by Lee Jae-rang, Head of the Bank of Korea New York Office, Lee Kyung-taek, Head of Korea Investment Corporation New York Branch, and Lee Jin, Head of the Export-Import Bank of Korea New York Office.

The Value-Up Program is a government initiative aimed at enhancing corporate value to address the undervaluation phenomenon in the Korean stock market. The government has decided to ease corporate tax burdens on a certain portion of increased shareholder returns, such as dividends and share buybacks. On the 18th (local time), Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, also revealed specific tax support measures for the Value-Up Program. The government plans to introduce corporate tax credits for companies that increase shareholder value efforts and pursue legislative amendments to apply separate taxation on shareholders' income.

Deputy Finance Officer Park said, "The initial reaction from Wall Street investors was unfamiliar, but recently, the number of foreign investors who view Korean stocks as undervalued compared to Korea's fundamentals has encouragingly increased," adding, "We share the awareness that there has been a Korean Discount compared to Japan, China, and Singapore."

Branch Manager Lee Kyung-taek said, "(Foreign investors) still see accessibility to the Korean market as limited," and added, "They seem to want more market openness, including improvements in corporate governance and enhanced accessibility." He further commented, "While it seems unlikely that individual investors in the U.S. will buy a lot of Korean stocks due to the Value-Up Project, institutional investors may increase their investment proportion in Korea."

Head Lee Jin stated, "I believe efforts to open the foreign exchange market are more important than the Value-Up Project." He explained, "When asked why foreign investors do not buy won-denominated bonds, they answer that they buy yen, which can be traded for a longer period if the credit rating is the same," indicating that strengthening foreign exchange market openness could be a greater investment incentive. From July, Korea's foreign exchange market closing time will be extended from the current 3:30 PM to 2 AM, but there is a need to extend it to 24 hours. Regarding this, Deputy Finance Officer Park emphasized, "There are immediate challenges such as manpower for 24-hour extension," and added, "We should place significance on the fact that the trading hours have been extended."