South Korean Reforms Draw Global Attention

Ali Saribas of Squarewell Partners recently commented to Nikkei on the potential for increased shareholder activism in South Korea, as global hedge funds and investors draw parallels between Korea’s current stock market momentum and Japan’s Abenomics-era rally.

South Korean stocks have surged—KOSPI rising about 30% year-to-date as of March 3—thanks to President Lee’s market-friendly policies and focus on corporate governance reform. These developments have sparked renewed foreign investor interest, despite recent political turbulence and lingering skepticism.

The Lee administration’s push for capital market reforms and its ambition to transform Korea’s valuation from a “discount” to a “premium” echo strategies from Shinzo Abe’s growth-driven policies. At a recent hedge fund meeting, participants weighed whether Korea could replicate Japan’s stock market success, noting common ground in bold fiscal measures, governance changes, and investor-friendly agendas.

Saribas observed that these government-led reforms may facilitate more activist campaigns in Korea during the second half of the year. However, economists like Sivan Tandong urge caution, citing Japan’s delayed reform impact and warning that lasting change in Korea may take time.

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