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KRX CEO says value-up program 'successful' so far

Published: 11 Feb. 2025, 18:51

SHIN HA-NEE
[email protected]

Korea Exchange (KRX) CEO Jeong Eun-bo speaks during a press conference in western Seoul on Feb. 11. [NEWS1]

Korea Exchange (KRX) CEO Jeong Eun-bo appraised the progress of the government-led Corporate Value-up Program so far as “successful,” promising to implement a series of financial market reform measures this year — including bolstered regulations of short selling and delisting — to resolve the undervaluation of domestic stocks.

“While major markets overseas significantly outperformed, fueled by interest rate cuts, AI innovation and more, Korea’s stock market remained relatively sluggish due to slowing economy and uncertainties,” noted Jeong during a news conference in western Seoul on Tuesday.

“Although the Korean market has been performing relatively well this year, the situation still remains challenging with the implications of U.S. President Donald Trump’s tariff policies and rising downward risks,” the chief executive said, addressing continued investor outflow away from the domestic market and toward overseas and cryptocurrency markets.

The bourse operator aims to turn such risks into opportunities this year, Jeong said, with incentive measures such as tax benefits to encourage companies to join the Corporate Value-up Program. KRX also plans to recognize and award companies with notable value-up achievements every May and scale up the Value-up fund.

Moreover, KRX will open offices in New York and London as part of its marketing efforts to boost the probability of Korea's inclusion in the developed market index by Morgan Stanley Capital International.

Jeong also promised to prevent illegal short selling practices to “regain investor trust” ahead of the planned lifting of the current ban on March 31 with the Naked Short Selling Detecting System, a centralized detection system for such transactions.

Regarding the upcoming launch of an alternative trading system, Nextrade, scheduled for March 4, KRX aims to establish a stable and efficient trading environment with an integrated management system and also diversify its business model to mitigate the expected decline in profit.

“As many experts have pointed out, [last year’s stock market underperformance] boils down to the issue of Korea’s industrial competitiveness,” Jeong said, addressing KRX’s plan to attract investors back to the domestic market.

The value-up program, on the other hand, aims to tackle the perceived undervaluation of domestic stocks relative to a company’s growth potential and fundamentals, the CEO explained.

“In that aspect, we believe that the value-up program has been progressing quite successfully,” said Jeong, citing a series of shareholder value enhancement plans announced by companies, especially in the financial sector.

BY SHIN HA-NEE [[email protected]]