Dividend Payments

An increasing number of South Korean companies are opting for interim dividend payment while announcing their Q2 earnings.
An increasing number of South Korean companies are opting for interim dividend payment while announcing their Q2 earnings.

 

According to the Financial Supervisory Service, an increasing number of South Korean companies are opting for interim dividend payment while announcing their Q2 earnings. Those companies include Samsung Electronics, Hyundai Motor Company, KPX Chemical, KCC, Hana Tour and many more and SK Telecom, S-Oil, Woori Bank and ING Life Insurance Korea are expected to follow suit.

An increase in dividend payment tends to have a positive effect on stock price movements. For example, SK Innovation announced its first interim dividend payment on June 15 and its stock price gained approximately 10% for the following 40 days or so. More recently, SK Innovation announced its Q2 earnings that disappointed many but its stock price fell only 1.69% on the day of the announcement. ING Life Insurance Korea said on July 13 that it would share more than half of its net profit with shareholders by carrying out year-end and interim dividend payment. Since then, foreign investors have increased their holding of shares in the company to a significant extent.

In addition, those companies raising their dividend payments are expected to have better relations with the Moon Jae-in administration, which is concentrating on corporate governance reform, transparent business and shareholder value enhancement.

Corporate owners themselves can benefit from the dividend payment as well. Hyundai Motor Company Chairman Chung Mong-koo and Vice Chairman Chung Eui-sun are scheduled to receive 11.4 billion won and five billion won after payment of 1,000 won in cash dividend per share. At least 5.8 billion won is slated to be given to Samsung Electronics Vice Chairman Lee Jae-yong on August 16, too.

 

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