SEOUL, May 2 Reuters South Korea on Thursday unveiled guidelines for companies participating in a government programme aimed at enhancing shareholder value, but some analysts warned that more incentives or penalties were needed for the reforms to have an impact.

The financial regulator39;s announcement is a followup to the Corporate Valueup Programme first proposed in February that is intended to help tackle the comparatively low valuations seen in the domestic stock market.

This socalled Korea discount refers to a tendency for local companies to have lower valuations compared with global peers due to factors such as low dividend payouts, and the dominance of opaque conglomerates known as chaebols.

The guidelines would help companies select key indicators that are seen as important for enhancing corporate value based on the characteristics of each firm, Kim Soyoung, vice chairman of the Financial Services Commission, said.

These included setting mid to longterm objectives, and devising plans for investment, shareholder return and business portfolio reorganisation, Kim said.

The benchmark KOSPI index showed little reaction, trading down 0.2 in afternoon trade, as investors found little new in the proposals.

Investors were for the most part expecting tax benefits, which authorities had said would follow, said Huh Jaehwan, an analyst at Eugene Investment Securities.

The guidelines provide principles and examples so companies can set their own plans to improve…