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68 Percent of Korean Chaebol Subsidiaries Paid Dividend This Year
Rising Dividend Rate
68 Percent of Korean Chaebol Subsidiaries Paid Dividend This Year
  • By Jung Suk-yee
  • April 4, 2016, 03:00
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The total market cap of the Korean stock market reached US$1.2514 trillion in Q1 this year, up 4.65% from US$1.1958 trillion in Q4 last year.
The total market cap of the Korean stock market reached US$1.2514 trillion in Q1 this year, up 4.65% from US$1.1958 trillion in Q4 last year.

 

Average Dividend Rate by Industry
Average Dividend Rate by Industry

 

According to the Federation of Korean Industries (FKI), the 235 listed subsidiaries of the South Korean conglomerates subject to cross-shareholding restrictions recorded an average dividend yield ratio of 1.12% this year, 0.12 percentage points higher than in the previous year.

The average dividend yield ratio of the 160 companies that paid dividends was 1.64%, 0.18 percentage points higher than a year earlier.

In the meantime, 64 of them posted a dividend yield ratio higher than the one-year treasury bond yield of 1.635% and their average was 2.81%. The 71 companies with a dividend yield ratio higher than the Bank of Korea’s benchmark interest rate of 1.5% posted an average of 2.69%. 35 of them paid dividends on preferred stocks and they showed an average dividend yield ratio of 2.18%.

When it comes to the average dividend yield ratio by industry, the financial and insurance sector was as high as 2.67%, followed by electrical, gas, steam and water supply business (2.56%), scientific and technological service business (1.72%) and manufacturing (1.67%).

Lee Cheol-haeng, head of the Corporate Policy Team of the FKI, explained that the South Korean conglomerates’ dividend yield ratio increased by approximately 12% from a year ago based on their efforts for shareholder value enhancement and the introduction of taxation on retained corporate earnings.