The U.S. Treasury said on the 29th in its report on "macroeconomic and foreign exchange policies of major trading partners" that "because the Korean stock market is less profitable than overseas markets, individuals and institutions are incentivized to invest abroad." The Treasury analyzed that the dominance of large family-owned conglomerates, a limited propensity for dividends, and a low price-to-book ratio (PBR) are part of the reasons the Korean stock market is less profitable.
The Treasury submitted the report, which includes these points, to Congress that day. The report evaluates the macro foreign exchange policies of countries that rank in the top 20 by trade volume with the United States. The report also reveals whether any country is designated a currency manipulator.
The Treasury report said that "capital outflows (from Korea) add to depreciation pressure on the won." It said the won-dollar exchange rate has risen as individuals or corporations in Korea sell won and buy dollars for overseas investments. This aligns with the analysis of Korea's foreign exchange authorities.
The Treasury report also said that "Korean individuals and corporations are encouraged to invest abroad to obtain higher returns." It added that "the dominance of large family-owned conglomerates, a limited propensity for dividends, and a low PBR are in part responsible for (the Korean stock market being less profitable than overseas markets)."
In fact, the PBR, a metric indicating the share price level relative to corporations' book value, is 1.6 times—less than half the advanced-economy average of 3.5 times. The average payout ratio for 2014–2023 (the share of net income distributed to shareholders as dividends) was also lower in Korea at 27.2% compared with the United Kingdom (137.4%), Italy (116.4%), Türkiye (30%), and Argentina (27.4%).
Meanwhile, in this report Korea was classified as a currency monitoring country, one step below a currency manipulator. It will not face separate economic sanctions.