A screen on the ceiling shows the benchmark KOSPI, secondary bourse Kosdaq and other real-time stock data at a dealing room of Hana Bank's headquarters in central Seoul, Tuesday. Yonhap

A total of 100 companies were listed on the Value-up Index the government launched on Tuesday. The index is part of efforts to bolster corporate governance and improve shareholder returns of Korean firms.

Announced by the country's sole bourse operator, the Korea Exchange (KRX), the index included 24 firms from the information technology (IT) sector, such as Samsung Electronics and SK hynix.

Some 20 were from the industrial sector, including HMM, Korean Air and POSCO International, while another 12 were from the health care sector and 11 others were from the discretionary goods sector.

A total of 10 firms were in finance and real estate, while nine others were from the materials sector.

Eight companies from the consumer staples sector also joined the index, as well as five from the telecommunications sector and one from the energy sector.

The chart and other real-time data on the Value-up Index will be opened to the public next Monday.

The government came up with the Value-up Index in a bid to provide new impetus to its Corporate Value-up Program announced in February to tackle the so-called "Korea discount."

The phenomenon refers to the undervaluation of equities in the Korean stock market compared to their global peers.

Intransparent corporate governance and low shareholder returns have been cited as the major reasons for such undervaluation.

To that end, the government has sought to create a new index to induce listed companies to follow its initiative. All 100 companies have been publicly traded — 67 from the benchmark KOSPI and 33 from the junior bourse Kosdaq.

"The success of the Corporate Value-up Program relies on corresponding firms' voluntary efforts, and the Value-up Index is expected to draw out such efforts," KRX Chairman Jeong Eun-bo said.

The KRX explained that the 100 companies were selected after mainly considering five factors — market capitalization, profitability, payout ratios, market valuation relative to book value and capital efficiency.

The 100 firms are ranked in the top 400 among all listed companies in terms of market capitalization.

They were also picked among those that have not posted losses for the past two years.

For the past two consecutive years, the companies also shared a proportion of their earnings with their shareholders in the form of dividends or canceled their own stocks in a bid to benefit retail investors.

Regarding market valuation relative to book value, or price-to-book ratio, the 100 firms were chosen among those ranked in the top 50 percent across all industries or within their respective sectors.

Concerning capital efficiency, the selected companies had a high return on equity, which is calculated by dividing net income by shareholders' equity.

The KRX underlined that the criteria for the Value-up Index are unique compared to the KOSPI 200, the country's best-known index.

It explained that the KOSPI 200 comprises the 200 largest publicly traded common stocks, all of them from the KOSPI, whereas the Value-up Index includes smaller caps from the Kosdaq.

It also highlighted that the KOSPI 200 values quantitative factors such as market cap, but the Value-up Index additionally values qualitative factors.

Meanwhile, the KRX will update the list of firms on the Value-up Index every year based on their level of compliance with the Corporate Value-up Program.