As the record-breaking rally in South Korea’s stock market continues to unfold, existing shareholders are launching a wave of share sales. JPMorgan stated that this trend is expected to further accelerate against the backdrop of South Korea’s ongoing corporate governance reforms, gradual dismantling of cross-shareholding by companies, and simplification of equity structures.
As the record-breaking rally in South Korea’s stock market continues to unfold, existing shareholders are launching a wave of share sales. JPMorgan stated that this trend is expected to further accelerate against the backdrop of South Korea’s ongoing corporate governance reforms, gradual dismantling of cross-shareholding by companies, and simplification of equity structures.
Jinsoo Ha, head of JPMorgan’s South Korean equity capital markets, pointed out that the current surge in equity transactions has been primarily driven by changes in ownership due to corporate governance reforms and strategic reductions, while high-quality overseas investors have formed a solid base of buying demand. Compiled data shows that since the beginning of this year, South Korea has completed six block trades, raising a total of approximately $1.3 billion, compared to only $296 million during the same period in the first quarter of 2025.
“Although we remain cautious, we are optimistic about the continued increase in block trading activity this year,” Ha said. “Corporate governance reform has been a significant driver of the stock market rally and has also provided strong support for equity capital markets activities.”
Over the past year, driven by leading chip companies such as Samsung Electronics ( $CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK)$ / $CSOP Samsung Electronics Daily (-2x) Inverse Product (07347.HK)$ Samsung Electronics $CSOP SK Hynix Daily (2x) Leveraged Product (07709.HK)$ ), the gains in the South Korean stock market have doubled. South Korean President Lee Jae-myung has been pushing for corporate governance reforms, aiming to address the so-called ‘Korea Discount’ issue by improving capital efficiency and eliminating opaque equity structures, further fueling the stock market rally.
Despite geopolitical tensions in Iran affecting global markets, equity trading in South Korea remains active, partly due to improvements in corporate governance, especially as the annual general meeting window approaches. Several major deals last week involved chaebols unwinding cross-shareholdings – a structure long criticized by foreign investors for suppressing valuations. Hanwha Systems plans to sell shares in Hanwha Ocean worth 1.7 trillion won ($1.2 billion), while SK Discovery, part of the SK Group, agreed to sell its renewable energy subsidiary SK Eternix to private equity giant KKR.
Ha added: “Equity monetization, including block trades, helps companies and core shareholders align with the direction of reform.”
This year’s large block trades have also involved companies such as LG CNS, HD Hyundai Ocean Solutions, Classys, and HPSP, each exceeding $200 million in size.
In contrast to block trades, initial public offerings (IPOs) have been relatively subdued. In 2025, South Korean IPOs raised $3.4 billion, only slightly higher than the previous two years. The listing of digital bank K Bank amid market volatility this month, followed by its share price falling below the issue price, signals weak demand for new shares and could further slow the pace of IPOs.
Ha stated: “Compared to block trades, IPOs require a longer preparation cycle, so it takes more time for market interest to translate into actual project pipelines.”
Editor/KOKO
