South Korea’s financial watchdog has issued a stern warning to companies that have failed to demonstrate growth, stating that they risk being delisted from the stock exchange. Financial Supervisory Service Governor Lee Bokhyun emphasized on Wednesday that there are firms that have stagnated for at least a decade, and the authorities are contemplating specific criteria for potential delisting.
Lee’s announcement follows the launch of Korea’s “Corporate Value-up Program” earlier this week, aimed at boosting valuations by encouraging companies to enhance management practices. However, the lack of detailed guidelines and enforcement measures disappointed investors.
In response to Lee’s comments, shares of value stocks like Samsung Life Insurance Co., Kia Corp., and Hyundai Motor Co. surged, propelling the benchmark Kospi Index to finish 1% higher. Investors interpreted the regulator’s stance as a strong signal for corporate reforms.
Analysts noted that low price-to-book ratio stocks saw a notable increase in response to expectations of the program’s mandatory nature. Kim Dae-wook, a strategist at Hana Securities, highlighted the revived optimism surrounding the Corporate Value-up Program.
