Signal Weak shareholder protection and a real-estate-heavy household balance sheet underpin the Korea discount

Summary

The government states that key corporate decisions are made around controlling shareholders, leaving ordinary shareholders poorly protected in mergers and spin-offs and boards weakly independent. Limits on investigating and punishing stock manipulation are linked to a high repeat offence rate of about 29 percent. New forms of unfair trading using social media and false reports are spreading while market surveillance has not kept pace. As a result the capital market is undervalued and private money flows disproportionately into property. Non-financial assets made up 65.2 percent of household assets in Korea in 2023, compared with 32.7 percent in the US, 36.4 percent in Japan and 51.6 percent in the UK.