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KB, Hana financial groups to join Value-up Index

Published: 16 Dec. 2024, 18:16 Updated: 16 Dec. 2024, 18:20

SHIN HA-NEE
[email protected]

A screen in Hana Bank's trading room in central Seoul on Dec. 16 shows the Kospi closing at 2,488.97, 5.49 points lower than the previous session. [YONHAP]

KB Financial Group and Hana Financial Group, which previously failed to make it into the Korea Value-up Index, have been included as constituents in the latest adjustment by the Korea Exchange on Monday.

SK Telecom, KT and Hyundai Mobis were also added to the index, which is a key element of the government-led Corporate Value-up Program aimed at boosting the undervalued share prices of domestic stocks, a phenomenon dubbed the Korea discount.

The latest inclusion of the five stocks is not an annual rebalancing but a follow-up adjustment following the index’s initial announcement back in September, which was met with criticism for excluding some major financial stocks that have been actively taking part in the Value-up Program.

The Korea Exchange said that it screened 42 out of 51 stocks that announced their plans to enhance shareholder returns between Sept. 24, when the index was revealed, and Dec. 6, and decided to add the five companies.

The inclusion will take effect starting Dec. 20. With the newest addition, the Korea Value-up Index now consists of 105 stocks. The Korea Exchange plans to adjust the number back down to 100 in the annual rebalancing of constituents slated for June next year.

The bourse operator also announced that it will establish another fund worth 300 billion won ($208.7 million) dedicated to the Corporate Value-up Program.

In November, the Korea Exchange already raised 200 billion won for the previous Corporate Value-up Fund, with 100 billion won raised from five state agencies and 100 billion won matched by the private sector.

The additional 300 billion won fund will be also raised via the same method, with the state-backed agencies raising 150 billion won and the rest by private firms. The private-backed proportion of the fund will begin operation this year, according to the Korea Exchange, starting with 30 billion won.

BY SHIN HA-NEE [[email protected]]