FSC and KRX Introduce Draft Standards for Publishing List of Companies with Low Price-to-Book Ratios

The Financial Services Commission and the Korea Exchange introduced a draft of detailed standards for the listing up (naming and shaming) of companies that have low price-to-book ratios on July 28. This is part of a broader set of measures introduced earlier in March this year that are intended to bring about fundamental improvements to the Korean capital markets. Under the naming and shaming policy, low PBR companies that are making no particular effort to improve shareholder value and are instead leaving their stock prices depressed and pinned at low levels will be listed up for publication. Key Details Listing up low PBR companies Based on the Global Industry Classification Standard (GICS), which is widely adopted for stock indexes around the world, companies in 11 key economic sectors and sub-industry groups will be ranked in the order of high to low PBRs. The listing up of stock companies in the order of high to low PBRs will take place twice yearly (on the first trading day of May and November every year). In the KOSPI market, companies that fall in the bottom 25 percent for three straight years (six consecutive times) will be listed up for publication. In the KOSDAQ marke...