JPMorgan Sees Korea Governance Overhaul Driving Equity Deals

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(Bloomberg) — A record rally in South Korean stocks is spurring a wave of share sales by existing holders, a trend set to accelerate as companies unwind cross-shareholdings and simplify ownership under a corporate governance overhaul, according to JPMorgan Chase & Co.

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The pickup in deals is being driven by governance‑led stake moves and strategic selldowns, while demand is anchored by high-quality foreign investors, said Jinsoo Ha, head of Korea equity capital markets at JPMorgan. A total of six block trades has raised about $1.3 billion so far this year, compared with about $296 million in the first quarter of 2025, according to data compiled by Bloomberg.

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“Though we are cautious, we are optimistic on block activity picking up further over the course of this year,” Ha said. “Governance reforms have been an important driver of the market rally, which has been supportive of” activity in equity capital markets.

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Korean stocks have more than doubled over the past year, driven by investors chasing gains in chip heavyweights like Samsung Electronics Co. and SK Hynix Inc. Adding fuel to the rally, President Lee Jae Myung has championed a corporate-governance overhaul to tackle the so-called “Korea discount” by improving capital efficiency and dismantling opaque ownership structures.

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Even as the war in Iran roiled markets, deals have perked up, partly as a result of efforts to improve corporate governance, especially with shareholder meetings approaching. Major transactions last week involved chaebols unwinding cross-holdings, long criticized by foreign investors as depressing valuations. Hanwha Systems Co. plans to offload a stake worth 1.7 trillion won ($1.2 billion) in Hanwha Ocean Co, while SK Group affiliate SK Discovery Co. agreed to sell its stake in renewable energy firm SK Eternix Co. to KKR & Co.

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“Monetization transactions, including blocks, can be an effective way for corporates and key stakeholders to align with the reforms,” Ha added.

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This year’s haul of block trades so far also includes transactions exceeding $200 million involving the shares of LG CNS Co., HD Hyundai Marine Solution Co., Classys Inc. and HPSP Co.

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In contrast with block trade activity, new issuance has lagged, with $3.4 billion raised from initial public offerings in 2025, just slightly eclipsing each of the previous two years’ proceeds. In a sign of the weak demand that may further slow fresh listings, digital lender K Bank Co.’s shares are trading below the offer price after a debut during this month’s market turmoil. 

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An “IPO has a much longer preparation period compared to blocks, hence deal interest takes longer to build itself into a tangible pipeline,” Ha said.

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