Global Investors Flock Back to Korean Stocks Amid Governance Reforms

South Korea's equity markets are attracting renewed interest from global asset managers as President Lee Jae-myung's administration implements sweeping shareholder reforms. Aberdeen Investments, Franklin Templeton, and Pictet Wealth Management are among the institutions increasing exposure to KOSPI-listed companies, drawn by rising dividends and unprecedented share buybacks.

The KOSPI entered bull market territory following policy shifts addressing the notorious 'Korea discount'—a valuation gap stemming from historical weaknesses in minority shareholder protections. Listed firms paid out 44 trillion won in dividends during 2024, a 12% annual increase, while buyback programs more than doubled to 18.7 trillion won.

Notable corporate actions include Hanwha Aerospace's revised capital plan, which scaled back a proposed share offering after investor pushback. Market participants now watch whether these structural changes can sustain foreign inflows and permanently re-rate Korean equities.