In just the first half of this year, more than 15 trillion won worth of treasury shares have been retired in the domestic stock market, already surpassing the total amount of treasury share retirements for all of last year. Observers note that the trend of listed companies announcing value-up (corporate value enhancement) plans and increasing shareholder returns is continuing, in line with the Lee Jaemyung administration's policy direction of strengthening the protection of general shareholders' rights.
According to the "Monthly Corporate Value Enhancement Status" released by the Korea Exchange on July 2, the amount spent by listed companies on treasury share buybacks as of the end of last month was 9.5 trillion won, while the amount for treasury share retirements reached 15.5 trillion won. This means that, in just the first half of this year, the total volume of treasury share retirements has already exceeded last year's full-year total of 13.9 trillion won. Cash dividends are also on the rise. The amount of cash dividends decided for the first half of this year was 37.6 trillion won, a 10% increase compared to the same period last year (34.2 trillion won).
Jung Eunbo, Chairman of the Korea Exchange, is delivering the opening remarks at the 2025 Value-Up 1st Anniversary Seminar held at the Korea Exchange in Yeouido, Seoul on May 27. Photo by Yonhap News
Companies are also demonstrating a strong commitment to value-up initiatives. From May last year through last month, a total of 156 companies (120 on KOSPI and 36 on KOSDAQ) have participated in disclosing corporate value enhancement plans. Of these, six companies made new disclosures in June alone: Hanwha Aerospace, Vitzrocell, Suprema, Fasoo, Hanwha Systems, and Orion. During the same period, four companies?Korea District Heating Corporation, Kolmar Holdings, Mirae Asset Securities, and Hanmi Semiconductor?submitted periodic disclosures following their initial announcements.
The market capitalization of companies making such disclosures accounts for 43.9% of the total market, and for KOSPI-listed companies, this figure rises to 50.2% of KOSPI's total market capitalization. Among the companies making disclosures, large listed companies with a market capitalization of 1 trillion won or more represented a high proportion at 62.2%, while small listed companies with a market capitalization of less than 100 billion won accounted for just 5.1%.
As of the end of last month, nine out of the top ten business groups?Samsung, SK, Hyundai Motor, LG, Lotte, POSCO, Hanwha, HD Hyundai, and Shinsegae (excluding GS Group)?have participated in disclosures. Of the 115 listed affiliates of the top ten groups, 47 have made disclosures. Notably, Hanwha Aerospace, the first Hanwha Group affiliate to announce a corporate value enhancement plan, recorded a total shareholder return (TSR) of 164.9% last year alone as a component of the Korea Value-Up Index.
In addition, expectations for capital market-friendly policies following the launch of the new administration have further fueled the momentum, with the Korea Value-Up Index reaching an all-time high of 1,243.15 on June 25. Since the beginning of this year, the index has risen by 30.5%, delivering an excess return of 2.5 percentage points over the KOSPI. As of the end of last month, the total net assets of value-up exchange-traded funds (ETFs) stood at 705.1 billion won, about 1.5 times larger than the initial net assets (496.1 billion won) recorded in November last year.
The Korea Exchange stated, "As shareholder-centric management culture spreads, the scale of shareholder returns?such as treasury share buybacks and retirements, and cash dividends?continues to expand among listed companies. Going forward, the Exchange plans to announce the 'Monthly Corporate Value Enhancement Status' every month to share updates on corporate value and shareholder rights enhancement, as well as improvement efforts, and to encourage voluntary participation by listed companies."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
