Heedlessly speeding toward the achievement of 'Kospi 5000' is a premature pursuit
In a significant development, the Kospi closed at a record high of 3,183.77 on July 23, marking an increase of 13.83 points or 0.44 percent from the previous session. This growth is part of a broader ambition to push the index beyond 5,000, a goal that South Korea is pursuing through a series of key reforms, particularly in the area of corporate governance.
One of the main areas of focus is the strengthening of minority shareholder rights. The aim is to improve protection for minority shareholders, which is essential for enhancing transparency and accountability in large corporations, including chaebols. Another crucial aspect is the expanded fiduciary duties, requiring directors to act in the best interests of all shareholders, thereby ensuring more efficient and transparent company management.
Improving transparency and accountability is another critical component of these reforms. This includes enhanced disclosure requirements, requiring companies to provide more detailed and timely information about their financial health and operations. Strengthening auditing and compliance standards is also part of the plan, with a focus on enhancing the role of independent auditors and ensuring strict compliance standards.
Addressing the "Korea Discount" is another key initiative. This involves efforts to reduce the persistent valuation gap between South Korean equities and those of peers like Japan and Taiwan, which has historically led to undervaluation of Korean stocks.
Unlocking property and financial resources is another strategy being employed. The Ad Hoc Kospi 5,000 Committee, for instance, aims to unlock financial resources, including those tied up in property, to support the growth of the stock market.
Policy initiatives, such as the recent revisions to the commercial code, are also seen as crucial steps toward reaching the Kospi target. These revisions are aimed at improving corporate governance and supporting minority shareholder rights.
President Lee Jae Myung has pledged to continue these governance reforms, which are seen as critical for achieving the Kospi target. Positive investor sentiment and supportive policies are also essential for driving the index higher.
However, the Democratic Party has taken a 'pass first, revise later' stance on the commercial code amendment, which has been met with disapproval from the business community. No specific details about the commercial code amendment were provided in the article.
Elsewhere, tariff negotiations between the U.S. and Japan concluded on July 23, with no direct connection made between the negotiations and the Kospi's performance in the article. The location of the negotiations was Hana Bank's main branch in Jung District, central Seoul.
The forum titled "What the Democratic Party Must Do to Achieve the 'Kospi 5,000' Era - Stock Market Session" was held at the National Assembly Members' Office Building in Yeouido, Seoul. JP Morgan has predicted that the Kospi will reach 5,000 over a two-year period, further fuelling optimism about the index's future prospects.
- The strengthening of minority shareholder rights is a significant aspect of South Korea's governance reforms, with the aim of improving protection for minority shareholders and enhancing transparency and accountability in large corporations.
- Enhanced disclosure requirements are part of the government's efforts to improve transparency and accountability, requiring companies to provide detailed and timely information about their financial health and operations.
- Strengthening auditing and compliance standards is another focus of the reforms, with a goal of enhancing the role of independent auditors and ensuring strict compliance standards.
- Addressing the "Korea Discount" is a key initiative, aiming to reduce the persistent valuation gap between South Korean equities and those of peers like Japan and Taiwan, resulting in undervaluation of Korean stocks.
- Unlocking property and financial resources is another strategy being employed, such as the Ad Hoc Kospi 5,000 Committee's goal of unlocking financial resources, including those tied up in property, to support the growth of the stock market.
- Policy initiatives, like the recent revisions to the commercial code, are considered crucial steps toward reaching the Kospi target, as they aim to improve corporate governance and support minority shareholder rights.
- JP Morgan has predicted that the Kospi will reach 5,000 over a two-year period, further adding to optimism about the index's future prospects, while the Democratic Party's 'pass first, revise later' stance on the commercial code amendment has garnered disapproval from the business community.
