Treasury share cancellations last year exceeded 20 trillion won for the first time, data showed. The Korea Exchange plans to introduce tougher shareholder return policies from this year, including mandatory disclosure of treasury share disposal plans, to usher in an era it calls Value Up 2.0.

In its recently released "2025 corporate value enhancement programme settlement," the exchange said 174 companies had disclosed corporate value enhancement plans as of the end of last year. That includes 171 final disclosures and 3 preliminary disclosures.

That amounts to only about 5 to 6 percent of all listed firms. But the market capitalisation share of the disclosing companies comfortably exceeded half of the total as large caps such as Samsung Electronics, Hyundai Motor and major financial holding firms took part in large numbers.

The qualitative growth in shareholder returns stood out in particular. In 2025, treasury share cancellations by South Korean listed companies totalled 21.4 trillion won, setting a new record. That is more than 50 percent above the 13.9 trillion won cancelled in 2024.

Companies had already cancelled 15.5 trillion won in the first half of last year alone, surpassing the full-year 2024 record, in what is seen as an unprecedentedly strong commitment to shareholder returns. Cash dividends also rose to 50.9 trillion won last year from 45.8 trillion won in 2024, increasing total shareholder returns.

The expansion in shareholder returns drew foreign investors back. The Financial Supervisory Service's "December 2025 trends in foreign securities investment" showed foreigners were net buyers of 1.524 trillion won worth of listed shares in December alone.

As of end-December, foreigners' holdings of listed shares stood at 1,326.8 trillion won, accounting for 30.8 percent of total market capitalisation. It is an analysis that expectations of easing the "Korea discount" led to improved foreign demand.

From this year, an upgrade dubbed "Value Up 2.0" will be implemented in earnest.

Oversight of treasury shares, dubbed listed firms' "hidden emergency funds," will be strengthened sharply. Under revised enforcement decrees to the Capital Markets Act, listed firms holding treasury shares of 1 percent or more must disclose their treasury share status and disposal plans, including cancellations or sales, starting with business reports filed this year.

Previously, the rule applied only to companies holding 5 percent or more. The threshold has been lowered to 1 percent, and disclosure will increase to twice a year from once a year, through annual and semiannual reports.

Mandatory disclosure of corporate governance reports will also be expanded. A requirement previously applied only to KOSPI-listed firms with assets of 500 billion won or more will be extended from this year to all KOSPI-listed firms, about 842 companies. Small and mid-sized listed firms will therefore have to transparently disclose to the market whether they comply with key governance indicators such as protection of shareholder rights and board independence.

The market is watching the regular change, or rebalancing, of the Korea Value Up Index scheduled for June. The Korea Exchange has said it will restructure the index's constituent stocks around companies that comply with disclosures.

After lifting the share of disclosing companies to 61 percent in the first rebalancing last year, the market expects penalties on non-disclosing firms to be strengthened further this year. At end-2025, the Value Up Index had surged 89.4 percent from the start of the year, outperforming the KOSPI's 75.6 percent gain.

A Korea Exchange official said 2025 was the first year the Value Up programme took root in the market and spread a shareholder-friendly management culture. The official said this year it will further solidify a market environment in which shareholder value is respected through tighter disclosure rules and index management.