Latest news with #corporatereforms
Zawya
5 days ago
- Business
- Zawya
Blowout South Korea stock rally on a knife-edge over tax plans
SINGAPORE - South Korea's tax policies have thrown the outlook for Asia's best-performing major stock market into doubt, with investors assessing the impact of higher corporate tax and trading levies on the country's long-promised reforms. Foreign investment flows into South Korean equities totalled $4.52 billion in July, LSEG data showed - the fastest pace in almost a year and a half - as the prospect of corporate reforms and a trade deal with the Trump administration lured overseas money. However, the KOSPI index, which had risen 33.3% so far this year, leading gains across the region, experienced its sharpest one-day drop since April on Friday. The index slumped 3.9% following the announcement of tax measures. Foreign analysts are uncertain if the "Korea discount" - a steep valuation gap with other Asian markets - will narrow as the government begins to implement reforms, but some institutional investors regard the changes as positive in the long run. Many of the country's biggest multinationals, the family-owned conglomerates known as chaebols, tightly control voting power and lack independent boards to safeguard minority investor interests. "We've been victims of poor corporate governance in Korea for over a decade," said Jonathan Pines, head of Asia ex-Japan at Federated Hermes. "Even though the market is up significantly, we believe it has further to go," he said. "The news flow is likely to remain positive, and Korean market valuations are still among the cheapest in the world." Korean stocks trade at a 12-month forward price-to-earnings ratio of 10.1, the lowest of any major market in Asia, according to data from Goldman Sachs. The investment bank gives the country an "overweight" rating and a target level of 3,500 in the next year, implying a 9.4% gain from current levels. South Korean equities gained momentum after the Financial Services Commission introduced its Corporate Value-Up Programme in February last year, aimed at improving corporate governance standards. The rally last month culminated with the announcement of a trade deal between Seoul and Washington on July 31, with a summit planned this month to finalise the agreement. However, tax reforms last Friday prompted mixed reactions. The government raised the peak corporate tax rate to 25% from 24% and the securities transaction tax to 0.20% from 0.15%. "While in general we think that tax changes do not impact markets for very long, we do think these measures are 180 degrees opposed to the sentiment of the 'Korea Up' programme, which was meant to boost valuation," Citi said in a note dated August 3, cutting its allocation. "Given how important this programme was in the recent large KOSPI outperformance, we think more downside is likely." Since then, the index has recovered some ground, advancing 2.5% this week. The reforms "proved underwhelming for the market", J.P. Morgan analysts said in a note. "Positive news on reform implementation, additional earnings improvements or repatriation flows will be needed to further the re-rating." Others were more sanguine. The creation of a separate tax rate for dividend income could boost the payout ratio of Korean companies, Societe Generale analysts said. "While the taxation details came with some negative surprises, we view the tax reform as a win-some-lose-some event, and not entirely a lose-lose situation," they said. Activist investors and corporate governance advocates remain hopeful about reforms under President Lee Jae-myung. Manoj Jain, co-CIO of Hong Kong-based Maso Capital, remains cautiously optimistic. "In conversations with management teams, pleasingly, we have sensed a change in tone where boards are now more receptive to shareholder views and feedback," Jain said. "We are in the second inning in terms of corporate governance reform," said Namuh Rhee, chairman of the Korean Corporate Governance Forum. "The biggest headwind is strong lobbying by chaebol and their lobbying agencies." The government may yet amend its tax plans. Jung Chung-rae, the leader of the ruling Democratic Party, said on Monday the party will hold internal discussions over the proposed levies. Finance minister Koo Yun-cheol, facing a grilling from Korean opposition lawmakers in parliament on Wednesday, said he would listen to public opinion, including a suggestion from a lawmaker to revise the rules constituting "large shareholders" subject to capital gains taxes. (By Gregor Stuart Hunter in Singapore; Additional reporting by Youn Ah Moon and Jihoon Lee in Seoul; Editing by Jacqueline Wong)
Reuters
6 days ago
- Business
- Reuters
Blowout South Korea stock rally on a knife-edge over tax plans
SINGAPORE, Aug 6 (Reuters) - South Korea's tax policies have thrown the outlook for Asia's best-performing major stock market into doubt, with investors assessing the impact of higher corporate tax and trading levies on the country's long-promised reforms. Foreign investment flows into South Korean equities totalled $4.52 billion in July, LSEG data showed - the fastest pace in almost a year and a half - as the prospect of corporate reforms and a trade deal with the Trump administration lured overseas money. However, the KOSPI index (.KS11), opens new tab, which had risen 33.3% so far this year, leading gains across the region, experienced its sharpest one-day drop since April on Friday. The index slumped 3.9% following the announcement of tax measures. Foreign analysts are uncertain if the "Korea discount" - a steep valuation gap with other Asian markets - will narrow as the government begins to implement reforms, but some institutional investors regard the changes as positive in the long run. Many of the country's biggest multinationals, the family-owned conglomerates known as chaebols, tightly control voting power and lack independent boards to safeguard minority investor interests. "We've been victims of poor corporate governance in Korea for over a decade," said Jonathan Pines, head of Asia ex-Japan at Federated Hermes. "Even though the market is up significantly, we believe it has further to go," he said. "The news flow is likely to remain positive, and Korean market valuations are still among the cheapest in the world." Korean stocks trade at a 12-month forward price-to-earnings ratio of 10.1, the lowest of any major market in Asia, according to data from Goldman Sachs. The investment bank gives the country an "overweight" rating and a target level of 3,500 in the next year, implying a 9.4% gain from current levels. South Korean equities gained momentum after the Financial Services Commission introduced its Corporate Value-Up Programme in February last year, aimed at improving corporate governance standards. The rally last month culminated with the announcement of a trade deal between Seoul and Washington on July 31, with a summit planned this month to finalise the agreement. However, tax reforms last Friday prompted mixed reactions. The government raised the peak corporate tax rate to 25% from 24% and the securities transaction tax to 0.20% from 0.15%. "While in general we think that tax changes do not impact markets for very long, we do think these measures are 180 degrees opposed to the sentiment of the 'Korea Up' programme, which was meant to boost valuation," Citi said in a note dated August 3, cutting its allocation. "Given how important this programme was in the recent large KOSPI outperformance, we think more downside is likely." Since then, the index has recovered some ground, advancing 2.5% this week. The reforms "proved underwhelming for the market", J.P. Morgan analysts said in a note. "Positive news on reform implementation, additional earnings improvements or repatriation flows will be needed to further the re-rating." Others were more sanguine. The creation of a separate tax rate for dividend income could boost the payout ratio of Korean companies, Societe Generale analysts said. "While the taxation details came with some negative surprises, we view the tax reform as a win-some-lose-some event, and not entirely a lose-lose situation," they said. Activist investors and corporate governance advocates remain hopeful about reforms under President Lee Jae-myung. Manoj Jain, co-CIO of Hong Kong-based Maso Capital, remains cautiously optimistic. "In conversations with management teams, pleasingly, we have sensed a change in tone where boards are now more receptive to shareholder views and feedback," Jain said. "We are in the second inning in terms of corporate governance reform," said Namuh Rhee, chairman of the Korean Corporate Governance Forum. "The biggest headwind is strong lobbying by chaebol and their lobbying agencies." The government may yet amend its tax plans. Jung Chung-rae, the leader of the ruling Democratic Party, said on Monday the party will hold internal discussions over the proposed levies. Finance minister Koo Yun-cheol, facing a grilling from Korean opposition lawmakers in parliament on Wednesday, said he would listen to public opinion, including a suggestion from a lawmaker to revise the rules constituting "large shareholders" subject to capital gains taxes.
Associated Press
16-05-2025
- Business
- Associated Press
Alert: Grabar Law Office is Investigating Claims on Behalf Long-Term Shareholders of Methode Electronics, Inc. (NYSE: MEI); Treace Medical Concepts, Inc. (NASDAQ: TMCI); Virtu Financial Inc. (NASDAQ: VIRT); and West Pharmaceutical Services, Inc.
PHILADELPHIA, May 16, 2025 (GLOBE NEWSWIRE) -- Methode Electronics, Inc. (NYSE: MEI): Current Methode Electronics, Inc. (NYSE: MEI) shareholders who have held Methode Electronics shares since prior to June 23, 2022, can seek corporate reforms, the return of funds back to the company, and a court approved incentive award - all at no cost to them whatsoever. To learn more visit: contact Joshua Grabar at [email protected], or call 267-507-6085. Why: A recently filed underlying securities fraud class action complaint alleges that Methode Electronics, via certain of its officers and directors, made false and/or misleading statements and/or failed to disclose that: (i) Methode Electronics had lost highly skilled and experienced employees during the COVID-19 pandemic necessary to successfully complete Methode Electronics' transition from its historic low mix, high volume production model to a high mix, low production model at its Monterrey facility; (ii) Methode Electronics' attempts to replace its General Motors center console production with more diversified, specialized products for a wider array of vehicle manufacturers and OEMs, in particular in the electric vehicle ('EV') space, had been plagued by production planning deficiencies, inventory shortages, vendor and supplier problems, and, ultimately, botched execution of Methode Electronics' strategic plans; (iii) Methode Electronics' manufacturing systems at its critical Monterrey facility suffered from a variety of logistical defects, such as improper system coding, shipping errors, erroneous delivery times, deficient quality control systems, and failures to timely and efficiently procure necessary raw materials; (iv) Methode Electronics had fallen substantially behind on the launch of new EV programs out of its Monterrey facility, preventing Methode Electronics from timely receiving revenue from new EV program awards; and (v) as a result, Methode Electronics was not on track to achieve the 2023 diluted earnings-per-share guidance or the 3-year 6% organic sales compound annual growth rate represented to investors and such estimates lacked a reasonable factual basis. What You Can Do Now: Current Methode Electronics shareholders who have held Methode Electronics stock since prior to June 23, 2022, can seek corporate reforms, the return of funds back to the company, and a court approved incentive award at no cost to them whatsoever. If you would like to learn more about this matter, you are encouraged to visit contact Joshua Grabar at [email protected], or call 267-507-6085. #Methode #MethodeElectronics $MEI Treace Medical Concepts, Inc. (NASDAQ: TMCI) If you have held Treace Medical Concepts (NASDAQ: TMCI) shares continuously since prior to May 8, 2023, you can seek corporate reforms, the return of funds back to the Company, and a court approved incentive award at no cost you. Visit or contact Joshua H. Grabar at [email protected] or call 267-507-6085 to learn more. Why? A recently filed securities class action complaint alleges that, Treace Medical Concepts, Inc. (NASDAQ: TMCI), via certain of its officers, made materially false and/or misleading statements and failed to disclose adverse facts about the Company's business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose that: (1) competition impacted the demand for and utilization of its primary product, the Lapiplasty 3D Bunion Correction System; (2) as a result, Treace Medical's revenue declined, and the Company needed to accelerate its plans to offer a product that served as an alternative to osteotomy (a surgical procedure involving the cutting and realignment of a bone to improve its position or function); and (3) Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis. What You Can Do Now: Current Treace shareholders who have held Treace shares since prior to May 8, 2023, can seek corporate reforms, the return of funds back to the company, and a court approved incentive award at no cost to them whatsoever. If you would like to learn more about this matter, you are encouraged to visit contact us at [email protected], or call 267-507-6085. #Treace $TMCI Virtu Financial Inc. (NASDAQ: VIRT) Class Action Survives Motion to Dismiss: A federal securities fraud class action complaint alleging that Virtu Financial Inc. (NASDAQ: VIRT), and certain of its officers failed to disclose to investors that it had improper safeguards in place for sensitive trader information, has survived a motion to dismiss. Virtu shareholders who have continuously held Virtu shares since prior to November 7, 2018, can seek corporate reforms, the return of funds back to the company, and a court approved incentive award at no cost to them whatsoever. Learn more or join by clicking contact Joshua H. Grabar at [email protected], or call 267-507-6085. WHY: A securities fraud class action complaint alleges that Virtu Financial (NASDAQ: VIRT), via certain of its officers, made false and/or misleading statements and/or failed to disclose that: (i) the Company maintained deficient policies and procedures with respect to its information access barriers; (ii) accordingly, Virtu had overstated the Company's operational and technological efficacy as well as its capacity to block the exchange of confidential information between departments or individuals within the Company; (iii) the foregoing deficiencies increased the likelihood that the Company would be subject to enhanced regulatory scrutiny; and (iv) as a result, Defendants' public statements were materially false and/or misleading at all relevant times. On March 17, 2025, a federal Court determined that key allegations were sufficiently pled to survive defendants' motion to dismiss. According to the Court's Order, 'essentially anyone at Virtu, including its proprietary traders' could directly access this material non-public information from at least January 2018 through April 2019, and to do so, Virtu traders only needed to use a 'widely known and frequently shared username and password.' WHAT YOU SHOULD DO NOW: If you are a current Virtu shareholder who has held Virtu stock since on or before November 7, 2018, you can seek corporate reforms, the return of funds spent defending litigation back to the company, and a court approved incentive award, at no cost to you whatsoever. If you would like to learn more about this matter, you are encouraged visit contact Joshua H. Grabar at [email protected] or call 267-507-6085. $VIRT #VirtuFinancial West Pharmaceutical Services, Inc. (NYSE: WST) Grabar Law Office is investigating whether certain officers and directors of West Pharmaceutical Services, Inc. (NYSE: WST) breached the fiduciary duties they owed to the company. If you are a long-term West shareholder who has held West shares since before February 16, 2023, you can seek corporate reforms, the return of funds back to the company, and a court approved incentive award at no cost to you whatsoever. Visit or contact Joshua Grabar at [email protected], or 267-507-6048 to learn more. Why? An underlying securities fraud class action complaint alleges that West, via certain of its officers, failed to disclose that: (a) while claiming strong visibility into customer demand and attributing headwinds to temporary COVID-related product destocking, West was in fact experiencing significant and ongoing destocking across its high-margin High-Value Products portfolio; (b) West's SmartDose device, which was purportedly positioned as a high-margin growth product, was highly dilutive to the Company's profit margins due to operational inefficiencies; (c) these margin pressures created the risk of costly restructuring activities, including the Company's exit from continuous glucose monitoring contracts with long-standing customers; and (d) as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially false and/or misleading or lacked a reasonable basis. As alleged in the underlying class action complaint, the truth about the fraud was revealed with a series of disclosures culminating on February 13, 2025, when West issued extremely weak 2025 revenue and earnings forecasts. West attributed the disappointing guidance in part to contract manufacturing headwinds, including the loss of two major continuing glucose monitoring customers that had begun transitioning to in-house manufacturing of next-generation devices after West 'made the decision to not participate going forward as our financial thresholds cannot be achieved.' West also revealed that its SmartDose wearable injector devices would be 'margin-dilutive' in 2025 and that it would be 'taking steps to improve [its SmartDose] economics, and all options are on the table.' On this news, West's stock dropped 38 percent. What You Can Do Now: Current West shareholders who have continuously held West stock since prior to February 16, 2023, can seek corporate reforms, the return of funds back to the company, and a court approved incentive award at no cost to them. If you would like to learn more about this matter at no cost to you, you are encouraged to visit contact Joshua H. Grabar at [email protected], or call 267-507-6085. #WestPharmaceutical #WST Attorney Advertising Disclaimer Contact: Joshua H. Grabar, Esq. Grabar Law Office One Liberty Place 1650 Market Street, Suite 3600 Philadelphia, PA 19103 Tel: 267-507-6085 Email: [email protected]
Bloomberg
08-05-2025
- Automotive
- Bloomberg
Japan's Industrial Heartland Warming Up to Winds of Change
Signs are emerging that Japan's much-touted corporate reforms are reaching the industrial heartland of Nagoya, after sweeping through Tokyo and helping lift share prices. Nagoya, a bustling city some 340 kilometers (211.27 miles) west of Tokyo, and the area around it are home to manufacturing giants including Toyota Motor Corp., the world's biggest automaker and Toyota group auto parts maker Denso Corp. Aichi prefecture, where Nagoya is located, is the country's biggest manufacturing hub and home to the largest producer of cars, electronic machines to ceramics among others.
