Following the doubling trend of the stock market, major shareholders in South Korea are cashing out! JP Morgan bluntly stated that under the trend of corporate governance reform, the pace will accelerate.

With the continuous fermentation of the record-breaking rally in the South Korean stock market, existing shareholders are raising a wave of share sales. J.P. Morgan said that against the backdrop of corporate governance reform in South Korea, companies gradually removing cross-shareholdings and simplifying the ownership structure, this trend will further accelerate. Jinsoo Ha, head of equity capital markets at J.P. Morgan Korea, pointed out that the current wave of equity transactions has been driven primarily by changes in ownership triggered by corporate governance reforms and strategic divestments, while high-quality foreign investors constitute a solid demand for buying. Compiled data shows that South Korea has completed 6 large transactions this year with total financing of about $1.3 billion, compared to just $296 million in the same period in the first quarter of 2025. "Although we remain cautious, we are optimistic about the continued increase in activity in large transactions this year," Ha said. "Corporate governance reform is an important driver of the current stock market rally and also provides strong support for equity capital market activities." Over the past year, led by chip leaders such as Samsung Electronics and SK Hynix, the South Korean stock market has doubled in value. South Korean President Moon Jae-in has promoted corporate governance reforms to enhance capital efficiency, dismantle opaque ownership structures, and address the so-called "Korea discount" issue, further fueling the stock market rally. Even with global market turmoil due to the tensions in Iran, equity transactions in South Korea remain active, partly due to corporate governance improvements, especially nearing the window for shareholder meetings. Several major transactions last week involved conglomerates unwinding cross-shareholdings - a structure that foreign investors have long criticized for suppressing valuations. Hanwha Systems plans to sell its stake in Hanwha Ocean worth 1.7 trillion Korean won (about $1.2 billion), and SK Group's SK Discovery has also agreed to sell its stake in the renewable energy subsidiary SK Eternix to private equity giant KKR. Ha added, "The realization of equity including large transactions helps companies and core shareholders align with the direction of reform." This year's large transactions have also involved LG CNS, HD Hyundai Ocean Solutions, Classys, and HPSP, with individual transaction sizes exceeding $200 million. In contrast to large transactions, IPOs have been relatively lackluster. South Korean IPOs raised $3.4 billion in 2025, only slightly higher than the previous two years. After digital bank K Bank went public this month amidst market volatility, its stock price fell below the issue price, indicating weak demand for new shares, potentially further slowing down the IPO pace. Ha said, "Compared to large transactions, IPOs require a longer preparation period, so market interest turning into actual project reserves takes longer."