Photo : YONHAP News
The Korea Exchange has refuted criticism that many firms that actively implement shareholder return policies, including dividends and share buybacks, were excluded from the Korea Value-up Index.
The securities exchange operator said the size of shareholder returns cannot be an absolute factor when selecting companies that will make up the index which was developed to address domestic companies’ undervaluation on the stock market.
While refuting critique surrounding the envisioned index, the operator said it will actively consider changing the companies that will comprise the index within the year before the regular review in June of next year.
Head of the operator’s securities market division, Yang Tae-young, said the Value-up Index is composed of companies that meet various qualitative conditions, including profitability, shareholder return, market valuation and capital efficiency.
Yang said if shareholder return is applied as the only standard for selecting firms that will make up the Value-up Index, high-growth companies will be at a relative disadvantage.