"Restarting the Value-Up Program for Listed Companies Is Essential"
"This is not the time for South Korea, which must pursue reform, restructuring, and innovation simultaneously, to be popping champagne over the KOSPI reaching 4,000."
The Korea Corporate Governance Forum stated on November 11 that in order for the KOSPI rally to be sustained, the value-up program targeting listed companies must be restarted. The forum warned that if the momentum for corporate governance reform slows due to complacency over the KOSPI 4,000 era, there is a risk that the KOSPI could plunge in the first half of 2026, either due to the semiconductor profit peak theory or foreign investor sell-offs.
In a statement titled "Caution Against the Exchange Chairman's Premature Optimism on the KOSPI Index," the forum said, "After breaking through 5,000, the KOSPI could reach either 6,000 or 3,000 in 2026-both scenarios are possible. If the semiconductor profit peak occurs at the end of 2026 or early 2027, the KOSPI will peak out within a few months."
The forum continued, "If the momentum for corporate governance reform, which began with the amendment of the Commercial Act, weakens and subsequent legislation fails to meet the now very high market expectations, the semiconductor profit peak theory will gain traction. Now is the time to remain vigilant. South Korea, which must pursue reform, restructuring, and innovation simultaneously, should not be celebrating the KOSPI 4,000 milestone."
In particular, the forum criticized the Korea Exchange, which was set to hold a seminar on "Leaping Toward the KOSPI 5,000 Era" that afternoon, targeting the chairman of the exchange. The forum stated, "Rather than repeatedly hosting promotional events with little substance, it would be better to meet with and persuade even the CEO of Samsung Electronics, who has yet to publicly announce a value-up plan." This was a criticism of the back-to-back similar events, following the "Market Experts Meeting for the KOSPI 5,000 Era" held just two weeks earlier on October 30.
The forum stated, "The value-up initiative has not yet succeeded. In May last year, external experts gathered to create an excellent model plan, but due to a lack of leadership and execution by the exchange, the results fell far short of expectations." Specifically, "Samsung Electronics, the top domestic company, has still not announced its value-up plan, and LG-listed companies, led by LG Electronics, disclosed plans that were as poor as an F grade. We wonder how sincerely Chairman Jung or other exchange executives have met with these companies' management to persuade them to announce their value-up plans," the forum pointed out.
Additionally, the forum cited the example of Hiromi Yamaji, former head of investment banking at Nomura Securities and now CEO of Japan Exchange Group (JPX), as a reason why the international financial community is applauding Japanese corporate governance reform. The forum emphasized that Yamaji strongly persuaded listed company management to participate in the value-up initiative through one-on-one meetings almost every day, including weekends.
The forum stressed, "The Lee Jaemyung administration must restart the value-up program for listed companies in the first quarter of 2026, when the third amendment to the Commercial Act passes the National Assembly and discussions on revising the stewardship code begin in earnest. This time, mandatory participation is necessary." The forum added, "All listed companies must participate, and key concepts such as resolving the Korea Discount, shareholder rights, investor protection, board independence, cost of capital, and capital allocation-core issues of the value-up initiative-must be included in each company's plan. If Top-down (legislation by the National Assembly) and Bottom-up (announcement and implementation of value-up plans by individual listed companies) approaches are combined, South Korea's capital market can make a great leap forward."
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