WhyItDropped

KOSPI · February 2, 2024

The day they promised to lift company value

+2.87%

single-day change vs previous close

Part of a longer stretch

Eight months of promising to lift company value

midway through · 2023-10-31 → 2024-07-11, +26.93% over the whole period

What happened that day?

  • The KOSPI rose 2.87% on the day
  • Regulators said they were preparing a programme to lift the value of listed companies, encouraging larger dividends and the cancellation of bought-back shares
  • That Korean shares trade cheaper than those elsewhere had long been noted — the same profit attracts a lower price
  • The programme located the cause in governance and shareholder returns: companies do not hand back much of what they earn
  • So what rose were banks, insurers, carmakers and holding companies — sectors with room to pay out. Not because earnings improved, but because there was more to distribute
  • The programme was guidance rather than obligation, and prices slipped back the next year as follow-through proved slow

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.