Corporate Value-up disclosure drive halted by martial law fiasco

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According to the Korea Investor’s Network for Disclosure System, only five have filed their value-up plans this month.

Two are listed on the main KOSPI bourse and the remaining three on tech-heavy Kosdaq.

The only entity of note is the state lender, Industrial Bank of Korea, a component of a basket of indices on the KOSPI 200. Large-cap private listed firms have made no progress in outlining or sharing their plans.

This month’s development is slower compared to the previous month, when nine firms shared their plans.

Among them are KT, Hyundai Department Store, LG Innotek, KT&G, and Hanmi Science.

They were added on the list of firms that made disclosures earlier including Kia, SK hynix, Lotte Holdings, KakaoBank and LG Group affiliates.

Meanwhile, the incentives included lowering the tax rate to 9 percent from 14 percent for financial income under 20 million won. The revision also reduced the rate to 25 percent for financial incomes exceeding 20 million won, a significant decrease from the current 45 percent.

Also included was a 5 percent corporate tax credit for the increase in shareholder returns.

An LS Securities report said, however, the failed motion had no material impact on the firms, since the revisions were not that attractive of an incentive to begin with.

“Firms and investors will see limited fallout from the failed revision. Coming into greater focus are the government’s rebalancing of the Value-up index and strengthened corporate strategies coming early next year.”

The success of Korea Value-up Exchange-Traded Products (ETPs) launched Nov. 4 to track the Corporate Value-up program, remains uncertain due to overall stagnant investor enthusiasm and questionable standards on the makeup of the underlying asset index. The high price-to-book (PBR) and high return-on-equity (ROE) ratios of most index stocks are shunned by institutional investors, who prefer undervalued low-PBR shares for their passive portfolio ETFs.

The Korea Value-up Index ended at an all-time low of 931.36, Dec. 6, down 6.13 percent compared to Sept. 30. All 12 of its ETFs registered a net loss.