This chapter analyses valuation trends, shareholder returns and the prevalence of listed companies trading below book value. The chapter explores the structural factors underlying these patterns and reviews the emergence of “value-up” initiatives across the region, assessing their design and implementation, and evaluating early outcomes. It also outlines policy considerations to support sustainable value creation, strengthen capital markets and improve investor confidence.
Asia Capital Markets Report 2026
Abstract
Despite strong economic growth and the emergence of globally competitive firms, equity market outcomes across much of Asia have been relatively moderate, with lower shareholder returns (4%), modest payout ratios (37%) and a large share (39%) of listed companies trading below book value.
While in some markets lower valuations reflect weak profitability and returns below the cost of capital, in others a number of fundamentally strong firms continue to trade at discounted valuations.
Persistent valuation discounts are linked to structural features of Asian markets, including high ownership concentration, the role of corporations and state-owned enterprises, low dividend payouts, substantial cash buffers and limited pressure from institutional investors.
In response, several Asian jurisdictions have introduced “value-up” initiatives aimed at improving capital efficiency, shareholder returns, corporate governance, disclosure, investor communication and overall market competitiveness.
The design of these initiatives differs across jurisdictions, ranging from China’s more prescriptive approach and Japan’s comply-or-explain model to voluntary programmes in Korea, Malaysia, Singapore, Chinese Taipei and Thailand.
Early market outcomes have been mixed. Since the launch of their programmes, Japan and Korea have recorded strong equity market gains of 31% and 14% (annualised return), respectively. However, improvements in valuations have been more limited and, in some cases, progress has been concentrated in only a narrow group of large-cap firms.
The effectiveness of value-up programmes depends on underlying market conditions, including liquidity, investor participation, governance frameworks and the credibility of disclosure. This highlights the need to embed valuation-enhancement measures within broader capital market and corporate governance improvements.
Policy efforts may therefore focus on supporting sustainable value creation rather than short-term valuation gains. This includes promoting disciplined capital allocation, supporting investment above the cost of capital, strengthening shareholder engagement and implementing reforms that improve market functioning, transparency and investor confidence.
Despite rapid economic expansion and the emergence of globally competitive companies, equity market outcomes across much of Asia have lagged behind underlying economic performance. In several jurisdictions, listed companies have generated comparatively weak shareholder returns, modest payout ratios, and a significant share of firms continue to trade below book value. While part of this reflects firm level weaknesses, including low profitability and returns below cost of capital, this chapter shows that broader structural and market related factors continue to weigh on valuations and investor participation across many Asian markets.
Ownership concentration is high in many markets, often linked to family-controlled groups, state-owned enterprises or affiliated corporate structures. In several economies, financial systems remain heavily bank-centred, limiting the relative role of equity markets in capital allocation and corporate discipline. In addition, some jurisdictions continue to face market infrastructure constraints, including low liquidity, barriers to foreign investor participation and/or underdeveloped trading systems. Together, these factors can weaken price discovery, reduce market confidence and contribute to persistent valuation discounts.
As a result, equity returns across many Asian markets remain relatively low. Between 2011 and 2026, Asian markets excluding Japan achieved an annualised return of 4%, compared with 9% globally (Figure 2.1, Panel A). At the national level, annualised returns (in local currency) have generally lagged global benchmarks, with most markets recording returns below the United States’ 12% (S&P 500 Index), with the exception of India, Pakistan and Chinese Taipei (Panel B). China, Hong Kong (China) and Thailand generated relatively low returns between 1-3%, while Malaysia, the Philippines and Bangladesh had negative returns (Panel B).
Returns expressed in US dollars tell a different story. Currency risk typically brings returns down when expressed in US dollars (Panel B). For example, while Pakistan had the highest annualised local currency return during 2016-2025 at 17%, its return in US dollars was below 6%, reflecting a 10% annualised depreciation of its local currency over the same period.
Equity performance remains relatively low across many Asian markets
Note: In panel A, the world is proxied by the MSCI World Index, and Asia excluding Japan is proxied by the MSCI Asia ex. Japan Index. The annualised growth rate is calculated between 03/01/2011 and 23/04/2026. Panel B shows annualised returns of benchmark equity indices between 30/03/2016 and 27/03/2026. Data are not available for Cambodia, Lao PDR and Mongolia.
Source: LSEG; OECD calculations; see Annex A for details.
Persistently low returns tend to be associated with valuation discounts. In Asia, the share of companies trading below book value is higher than at the global level. Excluding China and Japan, 39% of companies listed in Asia have a price-to-book (P/B) ratio below 1, compared with 34% globally. This is the case of more than half of listed companies in 7 out of 15 Asian jurisdictions, indicating that their market valuation is lower than their net assets (Figure 2.2).
However, the extent of valuation discounts varies considerably across jurisdictions. Thailand and Singapore stand out with the highest share of companies with price-to-book ratio below one, by number of listed companies (60%, 64%) and market capitalisation (30%, 39%). A significant share of listed companies has low price-to-book ratios also in Bangladesh, Hong Kong (China), Korea, Malaysia, Pakistan and Viet Nam. By contrast, China, Chinese Taipei and India have the lowest share of low price-to-book companies, below the global level.
A substantial share of listed companies in Asia trade below their book value
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Looking more closely at the distribution of price-to-book ratios, the share of Asian companies trading at low valuations is higher than the global share. Around 18% of listed companies in Asia excluding China and Japan have a price-to-book ratio below 0.5, compared with 15% globally (Figure 2.3). This share is the highest in Hong Kong (China) (36%) and Singapore (35%). Low valuations are rarer in some markets: in China, less than 1% of companies have price-to-book ratios below 0.5, while in Chinese Taipei the figure stands at 1%.
In many Asian markets, a high share of listed companies trade below half their book value
Note: It shows the distribution of companies as a share of total companies. Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
A subset of firms have high price-to-book ratios (above 5), particularly in India (24%), Indonesia (24%) and Hong Kong (China) (14%), as well as in Bangladesh (9%) and Korea (9%) (Figure 2.3). This points to a heterogeneous valuation structure, in which capital is concentrated in a relatively small number of high-performing firms with strong growth prospects, while a large share of the market trades at relatively depressed valuation levels.
Most low price-to-book companies in Asia are concentrated in a few sectors. Old economy industries, such as industrials, consumer cyclicals and basic materials, account for the largest shares across most jurisdictions (Figure 2.4). Real estate is particularly prominent in several markets, including Hong Kong (China), Indonesia, Malaysia, the Philippines and Sri Lanka. New economy industries such as technology companies are less likely to trade below book value. However, they still account for a sizeable share in Chinese Taipei (23%) and Korea (23%).
Listed companies trading at low price-to-book ratios in Asia are concentrated in a few sectors
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
A price below book value can signal weaker fundamentals, but it may equally reflect other factors, such as mature firms with limited growth options. In most Asian markets, companies with low price-to-book (P/B) ratio have median returns on equity (ROE) below market levels (Figure 2.5). However, in several markets, including Hong Kong (China), Indonesia, Korea and Singapore, ROE levels of low price-to-book companies remain close to the market level. Bangladesh stands with relatively high ROE for all firms.
In most Asian jurisdictions, companies with low P/B ratios have lower return on equity than the market
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). Return on equity (ROE) is calculated as total return over equity, as of 2024. Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Across all jurisdictions, a significant share of low price-to-book companies generate returns on invested capital (ROIC) below their weighted average cost of capital (WACC), indicating value erosion that helps explain lower market valuations. A few markets have a high share of low P/B companies and at the same time a high share of these companies earn less than their cost of capital (top right of the figure).
Where valuation discount is less common, a higher share of low P/B companies earn below their cost of capital
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). Companies with return lower than cost of capital are those with a return on invested capital (ROIC) lower than their weighted average cost of capital (WACC). WACC is calculated as the cost of total debt weighted by the share of debt in total capital plus the cost of equity capital weighted by the share of equity in total capital. Preferred equity shares are also taken into account whenever applicable.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
While markets such as Pakistan and Bangladesh have a significant share of low price-to-book companies, most of these companies are able to earn above their cost of capital. This suggests that valuation discount is not solely driven by weak capital efficiency but also reflects structural or market-specific factors.
Indeed, a number of low price-to-book companies show relatively strong fundamentals. They generate returns on invested capital above the cost of capital, record higher profitability and distribute higher dividends compared to market levels (Figure 2.7). This is the case in several markets and most prominently in Korea (193 companies), Hong Kong (China) (108) and Japan (78) (Figure 2.7). In Korea, these companies have a median ROE of 6%, compared with around 3% for the broader market, and their median dividend payout ratio is 34%, compared with 22% in the broader market.
Several Asian economies have a number of low price-to-book companies with strong fundamentals
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). Low P/B companies with strong fundamentals are companies that have P/B ratio below 1 and return on invested capital (ROIC) greater than the weighted average cost of capital (WACC), return on equity (ROE) and dividend payout ratio above the market median. Return on equity (ROE) is calculated as total return over equity and data correspond to end of 2024. Dividend payout ratio is calculated as total dividends paid over net income and corresponds to end of 2024. Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Several Asian equity markets suffer from low valuations, reflecting a combination of structural company-level, country-specific and region-wide factors.
High ownership concentration is a common feature in the region. Ownership structures dominated by corporate shareholders, the public sector or strategic investors can weaken market discipline and reduce investor confidence, contributing to valuation discounts. Corporate financial policies also play a role, as relatively low dividend payouts and elevated cash holdings limit capital distribution and may signal less efficient capital allocation. In parallel, low participation by institutional investors and restrictions on foreign investor access can constrain market depth, liquidity and price discovery. These effects may be amplified by gaps in market infrastructure, while geopolitical developments and economic policy uncertainty further increase risk premia and weigh on valuations.
2.2.1. Ownership concentration and structure
A key structural feature across many Asian markets is the relatively high degree of ownership concentration among listed companies. In such environments, dominant shareholders often retain significant control, which can limit minority shareholder influence, reduce liquidity and weaken market discipline, contributing to valuation discounts.
Jurisdictions with more concentrated ownership often tend to have a larger share of low price-to-book companies (Figure 2.8). In Asia excluding China and Japan, the top three shareholders hold more than half of the equity in 52% of listed companies, compared with 44% globally, while the share of low price-to-book companies is also higher (39% versus 34%). This pattern is particularly pronounced in markets such as the Hong Kong (China), the Philippines and Pakistan, where both ownership concentration and the proportion of low price-to-book companies are high.
Higher ownership concentration is associated with lower valuations across markets
Note: Data are not available for Cambodia, Lao PDR and Mongolia. Ownership concentration shows the share of companies where the top three shareholder own more than 50% of the equity.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Beyond ownership concentration, who owns companies also matters for valuations. In many Asian markets, corporate ownership is higher than in other markets, often reflecting the role of company groups and strategic cross-shareholdings. These ownership structures are sometimes seen as beneficial, providing stronger monitoring and more efficient internal capital allocation within company groups (Khanna and Palepu, 2000[1]; Admati, Pfleiderer and Zechner, 1994[2]). However, the presence of large controlling corporate owners may limit free float and market liquidity, consequently compressing valuations.
Higher corporate ownership shows a weak positive relationship with lower valuations in Asia (Figure 2.9). Corporate investors own 28% of listed equity in Asia (excluding China and Japan), compared with 23% globally. At the same time, the share of companies trading below book value is higher in Asia (excluding China and Japan), at 39%, compared with 34% globally.
Corporate ownership is associated with valuation discounts in Asia
Note: Data are not available for Cambodia, Lao PDR and Mongolia.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Institutional investors can contribute to value creation in their investee companies through active monitoring, engagement and pressure to improve governance and capital allocation. In Asia, however, their presence and engagement with investee companies remain limited compared to global levels (see Chapter 3).
In most Asian jurisdictions, institutional investors own, on average, a smaller share of the equity in low price-to-book (P/B) companies than in high P/B ones (Figure 2.10). This relationship likely runs in both directions. On the one hand, low P/B companies often exhibit characteristics, such as concentrated ownership, weak fundamentals and low capital efficiency, that both justify their lower valuations and discourage institutional investment. On the other hand, when institutional investors do own meaningful equity stakes, they may contribute to stronger performance and governance, supporting higher valuations and resulting in greater ownership in high P/B companies.
The gap in institutional ownership between high and low P/B companies is most pronounced in jurisdictions where low P/B companies are particularly prevalent, such as Bangladesh, Singapore and Viet Nam. By contrast, there is no meaningful difference in China and Chinese Taipei. Pakistan and Sri Lanka stand out as the only two jurisdictions where institutional investors own, on average, a higher share of the equity in low P/B companies.
Moreover, ownership of low P/B companies by foreign institutional investors is lower than domestic investor ownership across most jurisdictions. This is partly due to restrictions on foreign investor participation, which remains an important structural feature of several Asian equity markets. Limitations on market access constrain the pool of international capital and reduce the extent to which equity prices fully reflect firm-level fundamentals.
Institutional investor holdings tend to be low in low price-to-book companies
Note: The figure shows average institutional investor ownership in low P/B companies. Chinese investors are considered domestic for Hong Kong (China). Data are not available for Cambodia and Mongolia and Lao PDR.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details.
Chinese capital markets have not been fully opened to foreign investors, who instead rely on specialised access regimes such as qualified foreign investors (QFI), Stock Connect and Bond Connect to access A-shares and domestic bonds. Foreign investors also face structural barriers in Viet Nam. The country’s long-standing classification as an MSCI Frontier Market has resulted in limited inclusion in global investment mandates, although its upgrade by FTSE Russell to Secondary Emerging Market status, effective from September 2026, is expected to support capital inflows. Nevertheless, foreign ownership caps remain binding for many firms. While the general 49% ceiling was formally removed in 2015, sector-specific limits and domestic legislation continue to apply, including a 30% cap in banking (UNCTAD, 2015[3]; Duane Morris Vietnam, 2025[4]).
Restrictions also persist in other markets, although typically in more targeted forms. India and Indonesia maintain foreign ownership limits in specific sectors, while Korea imposes caps in certain strategic industries and has historically faced operational barriers to foreign participation (U.S. Department of State, 2025[5]). In markets such as Thailand and the Philippines, foreign ownership ceilings and related regulatory constraints continue to affect access in selected sectors. More broadly, foreign ownership caps, together with prefunding requirements and limited disclosure practices, have historically restricted market accessibility (World Bank, 2023[6]).
2.2.2. Dividend distribution and cash holdings
Corporate financial policies can contribute to lower valuations, particularly through low dividend payouts and high cash holdings. Limited distribution of earnings reduces direct returns to shareholders, while persistent cash accumulation may signal cautious or inefficient capital allocation, both of which can weigh on valuations. Asian listed companies have historically distributed a smaller share of earnings than firms in other regions (Figure 2.11, Panel A). In 2024, the median dividend payout ratio in Asia was 37%, compared to 41% globally.
In many Asian markets, ownership structures dominated by controlling shareholders and affiliated corporate groups can shape firms’ financial policies. With limited pressure from minority shareholders, companies may place less emphasis on distributing earnings and instead retain capital within the firm or broader corporate group. For example, in Korea, large family-controlled conglomerates (“chaebols”) have historically maintained low payout levels, reflecting a preference for internal capital allocation rather than shareholder distribution (Platinum Asset Management, 2025[7]).
Asian companies distribute lower dividends to shareholders and maintain substantial cash buffers
Note: The figure covers non-financial companies with available information for price-to-book ratios (P/B). In panel A, dividend payout ratio is calculated as total dividends paid over net income. In Panel B, the cash ratio is calculated as cash and short‑term investments over total assets.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details
High cash holdings also reflect this approach. In 2024, Asian companies held a median of 16% of total assets in cash, compared with 10% in Europe and 14% globally (Figure 2.7, Panel B). Cash levels have also increased over time, rising from 11% in 2000 to 16% in 2024. It is worth noting that in 2024, the median dividend payout ratio and cash level were more or less identical in the United States and Asia.
2.2.3. Market infrastructure
Market infrastructure constraints could further compound the current valuation discount. Underdeveloped short-selling and securities lending frameworks, and limited availability of hedging instruments, can increase transaction costs and perceived risks. Collectively, they increase transaction costs by raising perceived risks related to capital repatriation, leading investors to demand higher risk premia and, in turn, lower valuation multiples.
The state of short selling infrastructure across Asian markets also illustrates these constraints in practice. In Viet Nam, short selling of equities remains prohibited. Although the Ministry of Finance has outlined a roadmap to introduce regulated short selling between 2026 and 2028 as part of a broader market upgrade programme, no operational mechanism is yet in place (The Investor, 2025[8]). In Indonesia, the reintroduction of short selling, initially expected by end March 2025, was postponed by the Financial Services Authority (OJK) amid market turbulence, with implementation now deferred further into 2026 (IDN Financials, 2025[9]). Korea, meanwhile, fully reinstated short selling on 31 March 2025 after a 17-month suspension (KOREA.net, 2025[10]). The ban, introduced in November 2023 following prohibited naked short selling by foreign investment banks, was used to strengthen the regulatory framework and implement an electronic monitoring system.
The limited availability of hedging instruments in several Asian markets further compounds these challenges by restricting investors’ ability to manage risks and increasing the effective cost of investment. Across the region, buy-side firms such as asset managers, pension funds and insurers face regulatory restrictions on the use of derivatives, including limits on eligible asset classes, transaction sizes and counterparties (ISDA, 2024[11]). Lack of demand and other factors explain the underdevelopment of derivatives markets in some economies. For example, in Indonesia, the limited range of equity-based instruments and shallow derivatives market have been identified as constraints to capital market development, while banks are restricted from trading derivatives linked to securities (World Bank, 2024[12]). Similarly, in Cambodia, the derivatives market remains at a nascent stage and relies entirely on non-domestic underlying assets (CFA, 2021[13]).
2.2.4. Geopolitical and economic policy uncertainty
Beyond structural and market-specific factors, macroeconomic and geopolitical uncertainties amplify valuation pressures. Heightened tensions in the region, including periodic capital flow volatility, increase the perceived risk of disruption to trade, supply chains and capital mobility (Bain & Company, 2025[14]; FCLT Global, 2025[15]; LSEG, 2025[16]). These risks are often difficult to hedge and can lead international investors to apply a higher discount rate when valuing Asian equities. In addition, factors such as regulatory unpredictability, policy intervention, and weaker legal enforcement in some jurisdictions may further amplify uncertainty around future cash flows and investor protection.
In this context, Asian markets have become increasingly exposed to geopolitical risks. The Geopolitical Risk (GPR) Index shows that while Asia broadly tracked or remained below global risk levels in the early 2000s, it has exceeded it more consistently since the mid-2010s, with a marked divergence after 2020 (Figure 2.16, Panel A). This reflects the rising importance of region-specific geopolitical tensions, including US-China tensions, security concerns in East Asia and broader shifts in the global geopolitical landscape.
Geopolitical and policy uncertainty in Asia has risen sharply since the mid-2010s, exceeding global levels
Note: The Asia GPR index is constructed as a GDP-weighted average of country-level Geopolitical Risk (GPR) indices. Monthly observations are aggregated into annual averages. Both the Asia and Global GPR indices are normalised to have a mean of 100 over the period 1997–2015. For the EPU index, monthly series are smoothed using six-month moving averages to mitigate short-term fluctuations.
Source: Caldara and Iacoviello (2022[17]), Measuring Geopolitical Risk, https://doi.org/10.1257/aer.20191823 ; Baker, Bloom and Davis (2016[18]), Measuring Economic Policy Uncertainty, https://www.jstor.org/stable/26372674; Davis (2016[19]), An Index of Global Economic Policy Uncertainty, https://doi.org/10.3386/w22740; Davis, Liu and Sheng (2019[20]), Economic Policy Uncertainty in China Since 1949: The View from Mainland Newspapers, https://searchworks.stanford.edu/view/sp114hw3715; Arbatli et al. (2022[21]), Policy Uncertainty in Japan, https://dx.doi.org/10.2139/ssrn.2972891.
The Economic Policy Uncertainty (EPU) Index shows a similar pattern. Economic policy uncertainty has increased across several Asian economies, particularly in China and Korea, where it has risen sharply since the late 2010s and remains elevated (Panel B) The level of uncertainty in Japan is comparatively lower and more stable. Greater exposure to geopolitical and policy-related risks contribute to higher risk premia and lower valuations.
Several Asian economies have introduced policy initiatives aimed at addressing the persistent discount in corporate valuations. These “value-up” initiatives are typically a policy package designed to strengthen investor confidence and enhance the competitiveness of capital markets. Across jurisdictions, these programmes share several common elements: (i) improving corporate value creation and capital efficiency of listed companies; (ii) strengthening corporate governance frameworks and disclosure practices; (iii) improving market liquidity and trading infrastructure; (iv) redesigning listing, delisting and continued listing requirements; and (v) enhancing the ecosystem for investor relations and equity research. Together, these measures seek to encourage more efficient capital allocation and support higher market valuations.
2.3.1. Development of value-up initiatives in Asia
Malaysia launched the first value-up initiative in the region 2022, followed a year later by the Tokyo Stock Exchange’s programme, which is often seen as a catalyst for the spread of similar initiatives in the region. (Figure 2.13). Bursa Malaysia’s the Public Listed Companies Transformation Programme (PLCT) is a voluntary initiative to enhance corporate value through improvements in performance, governance, sustainability and digitalisation (SC Malaysia, 2021[22]). Although broader in scope than later valuation-focused reforms, it reflected early recognition that exchange-led initiatives can focus on strengthening corporate value.
In March 2023, the Tokyo Stock Exchange issued a request that attracted significant international attention, calling on all companies listed on its Prime and Standard markets to take "action to implement management that is conscious of cost of capital and stock price" (JPX, 2023[23]). The initiative primarily targeted companies with persistently low price-to-book (P/B) ratio, particularly those below 1.0, with the aim of improving capital efficiency and addressing chronically low market valuations. Under this initiative, companies were encouraged to disclose the benchmarks used to assess capital efficiency, typically measured as the cost of equity or weighted average cost of capital (WACC), and to demonstrate that they generate returns above these benchmarks. Indicators such as return on equity (ROE) and return on invested capital (ROIC) are considered key reference metrics.
Against this background, the initiative of the Tokyo Stock Exchange aims to encourage companies, particularly those with large, retained earnings and persistently low ROE, to pursue more effective capital allocation strategies. These may include increasing growth investments, improving shareholder returns, and in some cases undertaking mergers and acquisitions as a means of enhancing long-term corporate value.
In China, the CSRC introduced in November 2022 a three-year action plan (2022-2025) aimed at improving the quality of listed companies (The State Council of China, 2022[24]). The initiative focused on strengthening corporate governance, improving the regulatory framework, enhancing the timeliness and effectiveness of supervision and deepening market-oriented reforms. Building on these efforts, the State Council of the People’s Republic of China released in April 2024 a set of policy guidelines to promote the “high-quality development” of the capital market, referred to as the “Nine Guidelines (CSRC, 2024[25]).” The policy package outlined measures including stricter listing standards, strengthened discipline on cash dividend payments, tighter delisting rules, a zero-tolerance approach to market misconduct, stricter oversight of automated and high-frequency trading, and policies to encourage greater participation of medium- and long-term institutional capital.
Similar policy frameworks have emerged elsewhere in Asia (Figure 2.13). In Korea, the Financial Services Commission, together with the Korea Exchange and other related institutions, announced in February 2024 a policy framework to support corporate value enhancement. Subsequently, in May 2024, draft guidelines for the disclosure of "Corporate Value-up Plans" were published, with the Financial Services Commission, the Korea Exchange and the Korea Capital Market Institute jointly responsible for developing the detailed guidance (FSC, 2024[26]). Framed around the objective of addressing the so-called "Korea discount," the framework encourages listed companies to voluntarily formulate and disclose value-enhancement plans and communicate these strategies to the market.
Seven jurisdictions have introduced value-up initiatives in recent years in Asia
Note: Dates refer to the announcement date of initiatives. In most cases, announcement and launch dates are similar.
Source: See Table A.A.12 in Annex A.
In Singapore, the Monetary Authority of Singapore and the Singapore Exchange launched the Value Unlock Programme in November 2025, supported by SGD 30 million from the Financial Sector Development Fund (MAS, 2025[27]). The programme provides grants to listed companies to strengthen investor relations, strategy and communication. Unlike Japan and Korea, which focus on disclosure and capital efficiency targets, Singapore places greater emphasis on co-funding capacity building to address market mispricing, as part of broader efforts to deepen its equity market.
In Thailand, the Stock Exchange of Thailand introduced JUMP+ in 2025 as a flagship “Listed Company Value Creation Support Programme.” The initiative encourages companies to disclose value creation plans, provide regular updates to investors, and improve communication and corporate visibility. In parallel, the Securities and Exchange Commission Thailand introduced the Corporate Value-Up Programme, reflecting a coordinated effort to strengthen corporate governance and investor confidence (OECD, 2025[28]).
Most recently, in April 2026, the Securities Commission Malaysia and Bursa Malaysia jointly introduced the MY Value Up Programme, a collaborative initiative aligned with the Capital Market Masterplan 2026-2030. The programme is aimed at supporting Malaysian public listed companies in enhancing their long-term value creation and positioning themselves as globally attractive investment propositions. MY Value Up Programme places particular emphasis on encouraging public listed companies to adopt a more proactive approach in articulating and disclosing their mid- to long-term growth strategies, with a view to facilitating more meaningful engagement with domestic and regional investors. At launch, 88 companies were selected for initial engagement (BusinessToday, 2026[29]).
Several other Asian markets have not introduced dedicated value-up programmes yet. This often reflects differing policy priorities, particularly where persistent valuation discounts and large shares of companies trading below book value are not considered pressing concerns. For instance, valuations in India have remained relatively strong, reducing the perceived need for explicit value-up measures. Instead, regulators have focused more on strengthening corporate governance, tightening oversight of related-party transactions and enhancing disclosure standards than on directly boosting market valuations (ACGA, 2024[30]). In other markets, more foundational capital market reforms remain the priority. Indonesia and the Philippines have concentrated on improving market depth, liquidity and institutional frameworks, including higher free-float requirements, tax reforms and exchange modernisation (Chambers and Partners, 2025[31]; ASEAN Exchanges, 2025[32]). Viet Nam has focused heavily on market accessibility reforms aimed at achieving emerging market index inclusion, such as easing foreign investor constraints, improving settlement systems and upgrading trading infrastructure. FTSE Russell confirmed in April 2026 that the country will be upgraded to secondary emerging market status in September 2026 (Reuters, 2026[33]).
2.3.2. Policy tools used in value-up initiatives
Value-up initiatives are quite similar in their basic design, although there are still some important differences (Table 2.1). Most programmes target listed companies, with Japan being slightly different as it focuses more narrowly on firms listed on the Prime and Standard markets. The main differences appear in how strictly the programmes are implemented. In China, the framework takes a semi-mandatory approach, requiring boards to act when market valuations fall below fundamentals. Companies included in major indices are required to establish market value management policies, and companies with a price-to-book ratio below one for more than a year are required to formulate and publicly disclose value enhancement plans. Japan’s TSE initiative follows a comply-or-explain approach and appears to be gaining traction, supported by reputational incentives associated with public disclosure. As of March 2026, 93% of firms in the Prime market and 51% in the Standard market had already made disclosures in line with the initiative (JPX, 2026[34]). In contrast, Korea’s programme is fully voluntary, similar to the approaches taken in Malaysia, Singapore, Chinese Taipei and Thailand.
The tools used in these programmes also vary. Japan mainly relies on disclosure, such as value creation plans, to encourage companies to improve. Korea also emphasises disclosure but complements this with additional tools such as the Value-up Index, which creates market-based incentives for firms to enhance performance and visibility. In China, value-up is embedded in the regulatory framework rather than treated as a voluntary initiative. Disclosure of value enhancement plans is mandatory for certain firms, especially those with persistently low valuations. In addition, under State-owned Assets Supervision and Administration Commission of the State Council (China) (SASAC) guidelines, market value management is incorporated into the performance evaluation of SOE executives, strengthening management incentives.
Singapore’s Value Unlock Programme differs from other value-up initiatives in that it focuses less on disclosure or regulatory pressure and more on directly building firm capabilities. Rather than requiring companies to publish value enhancement plans, it provides financial support through grants to improve investor relations, strategic communication and corporate planning.
Malaysia and Thailand rely more on softer, governance-oriented policy tools compared to more prescriptive approaches. In Malaysia, initiatives focus on strengthening corporate governance, enhancing transparency, and promoting better strategic communication, often supported by benchmarking and rankings that create reputational incentives for improvement. Thailand, meanwhile, promotes value enhancement by encouraging listed companies to develop and communicate clear value creation strategies, with a strong emphasis on improving investor engagement and market perception.
Source: See Table A.A.12 in the Annex A.
In several jurisdictions, value-up programmes have also been complemented by broader structural reforms aimed at improving overall market quality and reinforcing the credibility of valuation-enhancement efforts. In Japan, for example, the Tokyo Stock Exchange has tightened continued listing requirements, particularly for Growth Market companies, reflecting concerns that listing had become an end goal for some firms rather than a stage in sustained corporate development (JPX, 2026[35]). In Korea, the authorities have pursued parallel reforms to strengthen shareholder rights, improve dividend practices and enhance capital market accessibility alongside the Value-up Programme.
The impact of value-up programmes on public equity market performance remains difficult to assess, given the wide range of macroeconomic and structural factors that influence equity valuations. Nevertheless, a number of preliminary observations can be drawn from available data.
First, among jurisdictions where programmes have been in operation for more than two years (Japan, Korea and Malaysia), outcomes have diverged markedly. Japan and Korea have recorded sustained market appreciation with an annualised growth in their equity indices of 14% and 31% respectively (Figure 2.14). By contrast, there is no visible effect in Malaysia, with annualised index growth of only 2%.
China and Chinese Taipei have also recorded sizeable equity market gains since the introduction of their value-up programmes. The Chinese Shanghai Stock Exchange (SSE) Index grew at an annualised rate of 19% and the Chinese Taipei index recorded a 27% growth. In Thailand and Singapore, value-up programmes are even more recent. While it is too early to assess the outcomes, both markets have recorded notable annualised growth rates of 55% and 28%, respectively.
Korea and Japan recorded the longest and strongest growth in their equity markets following the introduction of value-up programmes
Note: The figure shows main benchmark indices’ annualised USD returns. Indices included are the following: KOSPI (Korea), SET Index (Thailand), FBM KLCI (Malaysia), STI (Singapore), TAIEX (Chinese Taipei), TOPIX (Japan), SSE Composite (China). Highlighted parts correspond to the period after the introduction of value-add programmes for each jurisdiction.
Source: LSEG.
Trends in company valuations across value-up jurisdictions have been mixed, and do not always mirror broader equity market performance. China experienced the most pronounced improvement, with the median price-to-book ratio rising from 2.3 at the time of the programme's introduction in November 2024 to 2.9 twelve months later (Figure 2.15). Japan has shown a more gradual but sustained upward trajectory, with the median price-to-book ratio increasing from 1.1 at launch to 1.2 after one year and 1.3 after three years. Singapore, where the programme is still in its early stages, has also recorded a modest improvement, with the median price-to-book ratio slightly rising from 0.8 to 0.9 in the three months following the launch.
By contrast, Chinese Taipei and Korea have seen their median price-to-book ratios decline since the introduction of their respective value-up programmes. This apparent disconnect with the strong performance of their equity markets might suggest that the index returns are mainly driven by a few large cap companies while there has not been a meaningful improvement in company valuations in the broader market.
In addition, company valuations have barely moved in Thailand and Malaysia since the introduction of their value-up programmes. In particular, the value-up programme in Malaysia has been in operation for over three years, but the median price-to-book ratio has remained broadly unchanged at around 0.9. Taken together with the weak performance of the Malaysian equity market over the same period, this may indicate that the programme had a limited impact on valuation improvement.
Value-up programmes have had limited immediate impact, with only China and Japan seeing meaningful P/B gains
Note: The figure shows non-financial companies. Price-to-Book ratio shows the median of companies’ 3-month rolling average price-to-book (P/B) ratios. P/B ratio is calculated as the closing price over book value per share. The change of valuation in Singapore is shown with only three months of data due to the later launch of its value-up initiative and limited observations.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg; see Annex A for details
Market liquidity is a key factor shaping the effectiveness of value-up initiatives. More liquid markets tend to support stronger price discovery, facilitate investor participation and enable corporate actions, such as share buybacks, to translate more effectively into valuations. By contrast, in less liquid markets, limited trading activity and higher transaction costs can weaken the transmission of such measures to equity prices. In this context, there are early indications that liquidity conditions may have improved in some jurisdictions following the introduction of value-up programmes, although the extent and persistence of these effects require further assessment.
China is by far the most liquid market, with a turnover ratio of 266% in 2025, up from 206% at the time of its value-up programme introduction in 2024, the largest absolute increase recorded across all jurisdictions (Figure 2.16). Japan, Korea and Chinese Taipei also exhibit relatively high liquidity with turnover ratios in 2025 of 127%, 121% and 99%, respectively. While Japan saw a modest increase in market liquidity following the introduction of its value-up programme, Korea and Chinese Taipei have experienced a decline, mainly driven by a sharp rise in total market capitalisation, which was unmatched by the trading value, lowering liquidity.
At the other end of the spectrum, Malaysia remains the least liquid among value-up jurisdictions at a turnover ratio of 29% in 2025. Liquidity remained broadly stable between 2022 and 2025, except for a modest temporary rise to 37% in 2024.
Value-up programmes have been associated with increased investor interest, as reflected in equity fund asset flows. Korea has recorded the largest surge in the assets under management (AUM), more than doubling between the launch of its value-up programme and March 2026. Notably, this increase was not immediate, as the rise materialised approximately one year after the programme's introduction, suggesting a lag between policy announcement and investor response. Japan has seen sustained growth in equity funds’ AUM, rising by more than 50% over three years. China and Chinese Taipei have also recorded significant increases. Thailand, where the value-up initiative is relatively recent, recorded a more modest rise. Malaysia stands apart as the only jurisdiction where equity fund’s AUM has declined over the period, consistent with the broader absence of market impact observed.
Markets with higher liquidity have seen greater investor interest after the introduction of value-up programmes
Note: In Panel A, turnover ratio is calculated as total annual traded value over market capitalisation at the end of the year. Turnover ratio in China refers to Shanghai Stock Exchange (SSE). The turnover ratio for the year of the value-up programmes refers to 2024 for Chinese Taipei, Korea and China; 2023 for Japan; and 2022 for Malaysia. No change in liquidity is shown for Thailand, as its value-up programme was introduced in 2025. Panel B shows quarterly assets under management (AUM) of open-ended funds and ETFs invested in equities in each market.
Source: Morningstar Direct; stock exchange websites and publicly available sources; see Annex A for details.
Share buybacks represent one of the most direct mechanisms through which companies can signal confidence in their own valuation and improve the use of their excess capital. In Asia, while share buybacks have increased across most jurisdictions that have introduced value-up programmes, the pace and scale of this shift differ markedly. Japan has seen the strongest and most sustained growth in buyback activity. Listed companies in Japan announced 372 share buybacks in the first quarter of 2025, up from 233 in the same quarter of 2023, when the value up programme was introduced (Figure 2.17). Chinese Taipei has also experienced a significant rise in share buyback announcements, supported by the Taiwan Stock Exchange’s decision to reward companies with strong buyback execution rates by giving additional credit in their corporate governance assessments and simplifying the process for companies to announce share buybacks (Taiwan News, 2025[36]).
In China and Korea, progress has been more moderate, with buyback activity increasing but not as fast as in Japan and Chinese Taipei. In Singapore, where the programme was introduced more recently, buybacks remain limited. Six months after implementation, only two announcements were made in the second quarter of 2026. Malaysia has also not experienced a noticeable rise in buyback activity since its programme was launched two years ago. Thailand stands apart with a declining trend in buyback announcements.
Share buybacks have risen sharply in Japan and Chinese Taipei, but remain limited in most other Asian markets
Note: T0 shows the number of buyback announcements in the quarter when the value-up programme was introduced.
Source: LSEG
Strengthening corporate governance and ownership structures. Given the high degree of ownership concentration and the prevalence of corporate and public sector ownership in many Asian markets, policy efforts could continue to focus on strengthening governance frameworks and minority shareholder protection. Concentrated ownership is associated with lower valuations, reflecting concerns around limited external monitoring, related party transactions and weaker market discipline. Enhancing board independence, improving transparency and addressing governance risks in group structures could help reduce these valuation discounts.
Promoting more efficient capital allocation and shareholder returns. Relatively low dividend payouts and elevated cash holdings across Asian firms point to a conservative approach to capital allocation that may weigh on valuations. While some value-up programmes have encouraged higher payouts, sustained improvements will depend on more disciplined investment and clearer capital allocation strategies. Strengthening disclosure around the use of capital and aligning investment decisions with returns above the cost of capital could support investor confidence and capital efficiency.
Supporting long-term investment and sustainable value creation. While some programmes have encouraged higher dividends and share buybacks, these measures primarily redistribute current earnings and do not guarantee stronger long-term growth. Sustained improvements in valuations depend on disciplined investment, innovation and capital allocation above the cost of capital. Broader reforms that support long-term strategies and strengthen relationships between companies and investors can reinforce the effectiveness of value-up programmes.
Broadening investor participation and strengthening market discipline. Low participation by institutional and foreign investors reduces market depth, liquidity and the effectiveness of price discovery. Low price-to-book firms tend to have lower institutional ownership and are more heavily held by domestic investors, which may weaken external monitoring. Policies aimed at deepening domestic institutional investor bases, promoting active stewardship and easing barriers to foreign participation could strengthen market discipline and improve valuation outcomes. This highlights the importance of deeper and more diversified capital markets in supporting effective price discovery and valuation.
Enhancing market infrastructure, accessibility and policy certainty. Market infrastructure constraints, including underdeveloped short-selling and hedging frameworks, as well as operational barriers to foreign investors, can increase transaction costs and risk premia, weighing on valuations. At the same time, geopolitical and policy uncertainty further raises perceived risks. Addressing these challenges requires strengthening market infrastructure, improving market access and enhancing policy transparency and regulatory predictability. Reinforcing legal systems and investor protection can also support more stable and efficient pricing.
Improving monitoring frameworks for valuation outcomes. Early evidence suggests that value-up programmes may have supported market sentiment and equity performance in some Asian markets. However, these outcomes should be interpreted with caution, as gains have often been concentrated among a narrow group of large-cap firms, while broader valuation metrics remain weak. This underscores the need for broader evaluation frameworks that go beyond index performance to include firm-level indicators such as valuations, capital efficiency and the distribution of returns.
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