Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Securities firms strengthen returns to shareholders
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By Anna J. Park
By Anna J. Park
Amid bearish stock market conditions and decreased average daily transactions in local stock trading, local securities firms have come up with various measures to strengthen returns to their stock shareholders.
While average daily stock trading transactional amounts stood at 20.7 trillion won ($17.2 billion) last month ― the lowest level since May 2020 ― securities firms are able to pursue proactive shareholder return policies as the local brokerage sector raked in record-high operating profits last year.
Mirae Asset Securities announced its three-year plan of shareholder return policies late last month. The securities firms plans to purchase 10 million of its own shares, which are estimated to be worth over 83 billion won, while retiring 20 million of the firm's shares worth over 174 billion won during the next three years. The securities firm also decided to pay out dividends of 300 won per share. The firm aims to maintain over 30 percent of annual net profits to be spent on increasing returns to shareholders.
Kiwoom Securities also decided late last month to repurchase 500,000 of its own stocks worth 44 billion won over the next three years. The move came as the securities firm's stock price recorded a bigger fall rate during January than the average decrease local brokerage companies saw during the same period.
In a similar move, Samsung Securities decided to pay out an all-time high level of dividends for its shareholders. The brokerage unit of the Samsung conglomerate will pay dividends of 3,800 won per share in April, which is a whopping 72 percent higher than its 2,200 won dividend last year. The total amount of dividend payouts will be 339 billion won, which is nearly double last year's 196 billion won.
The huge increase in its dividends is attributed to the company's solid earnings last year. Its operating profit increased to over 1.3 trillion won in 2021, which is a 94 percent jump from 678 billion won logged in the previous year.
However, some market watchers expressed concerns that such strong shareholder return policies on boosting stock prices could have limited effect due to the global macro conditions of rising interest rates and the geopolitical landscape.