South Korean shares rally as President Lee to announce market reforms (updated)

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18/03/2026 02:54

President Lee discusses market reforms with analysts, investors

Duplicate listing practices by conglomerates to be banned

Lee has vowed to resolve Korea Discount since taking office

KOSPI rises 41% this year on market reforms, AI hopes

Recasts after meeting

SEOUL, March 18 (Reuters) - South Korean President Lee Jae Myung on Wednesday pledged fresh reforms to address chronic undervaluation in the domestic stock market, including a proposed ban on duplicate listings in a single market by holding companies and their subsidiaries, a practice often blamed for the "Korea discount."

Since taking office in June 2025, Lee has introduced a range of market reforms to resolve the Korea discount - which refers to the lower valuations that South Korean companies typically trade at relative to their global peers, partly reflecting the mostly opaque structures of family-owned conglomerates.

"The issue of governance structure has improved a lot through Commercial Act revisions and other policy measures," Lee said at a televised meeting with analysts, institutional investors and listed companies, which was held after market volatility heightened earlier this month due to the Middle East conflict.

"The market is in the process of normalisation, but Korea Premium may also be possible," Lee said, as he vowed to pursue policy efforts to restore investor confidence in the market.

At the meeting, Lee Eog-won, the chairman of the Financial Services Commission (FSC), said specific plans would be prepared to ban duplicate listing practices by conglomerates, which analysts say dilutes the value of existing shares by lowering earnings per share (EPS).

Duplicate listing is estimated to account for 20% of South Korea's total market capitalisation, 400 times higher than the U.S. market, 10 times higher than China, five times higher than Japan and higher than any other market in the world, Kim Dong-won, an analyst at KB Securities said at the meeting.

The government's market stabilising programme of 100 trillion won ($67.33 billion) would be expanded if needed to respond to heightened volatility, FSC Chairman Lee also said.

The benchmark KOSPI .KS11 extended gains during the meeting, triggering a trading curb, before closing up 5.04% at the highest level since February 27.

Since Lee took office, the ruling Democratic Party has introduced a total of three amendments to the Commercial Act to better protect the interests of minority shareholders. The latest revision requires listed companies to cancel newly acquired treasury shares.

An official from the country's National Pension Service, the world's third-largest public pension fund with huge influence in the domestic market, said at the meeting it strongly opposes various corporate attempts to circumvent the intent of recent revisions to the Commercial Act.

The KOSPI has risen 41% so far this year, after soaring 76% in 2025, its biggest jump since 1999, with analysts attributing the rally to the Lee administration's market reforms and optimism over artificial intelligence.

($1 = 1,485.2300 won)

 (Reporting by Heejin Kim and Jihoon Lee; Editing by Ed Davies, Jacqueline Wong and Shri Navaratnam)

 ((Heejin.Kim@thomsonreuters.com;))