PBR 0.8If the ban passes, incentives for listed low-PBR stocks will change
If the Democratic Party’s proposed 'PBR 0.8ban' bill to amend the inheritance and gift tax law passes, the incentive for major shareholders to deliberately depress stock prices will disappear, and instead they will have an incentive to push prices up, a Hanwha Investment & Securities researcher 10reported. The effect could last for years if the installment payment period is lengthened.
The inheritance and gift tax amendment bill submitted by the Democratic Party, the so-called 'PBR 0.8ban,' is under discussion. Hanwha Investment & Securities researcher Um Su-jin summarized the bill’s effects in a report released on 10.
The report said that if the bill passes, the incentive for major shareholders of listed companies to deliberately lower stock prices in order to reduce inheritance and gift taxes would disappear. Instead, it said, the incentive to raise share prices and spread the tax burden could increase.
The report also said that if the structure of paying the increased tax in installments remains, the incentive for major shareholders to manage stock prices will continue during that period. It also pointed to the possibility that this could lead to a 'domino effect'.
The report focused on the structural changes to the system rather than on specific company names. The bill adjusts taxation based on the lower end of PBR (price-to-book ratio).
It added that the report’s content could vary depending on the final form in which the bill is actually settled. The legislative process and the timing of implementation are variables.
The article did not provide specific dates, such as the timing of legislation or the National Assembly’s review schedule. The report summarized that if the system is implemented, the behavior of major shareholders in listed companies and market expectations could change.
Sources: 연합인포맥스
Bullstory synthesized this report from the linked sources. AI may have assisted the writing process. Check the original reports for factual confirmation.