Foreigners enjoy huge dividends, but not locals

Home > Business > Finance

print dictionary print

Foreigners enjoy huge dividends, but not locals

Foreign investors are expected to take home dividends worth over 9 trillion won ($7.8 billion) this year, more than double the amount local investors are expected to reap from overseas firms, data showed yesterday. Overseas investors raked in a total of $6.73 billion from dividends in the January to October period, according to the data by the Bank of Korea. When the average currency rate over the 10-month period is applied, the amount totals 7.4 trillion won.

Given that dividend payments to foreigners tend to spike at the end of the year, market watchers said domestic companies are likely to pay out more than 9 trillion won to their overseas shareholders this year.

Meanwhile, the data showed that local investors earned 3.8 trillion won from dividends paid out by foreign companies in the cited period, raising worries about the impact the imbalance could have on local capital.

“Since it has only been three to four years since local investors started buying holdings in foreign firms, the imbalance is likely to continue for the time being,” said Lee Jong-woo, the research head at Solomon Investment & Securities. But Lee said foreigners’ high dividend earnings may indicate an excessive outflow of sovereign wealth given the fact that foreign capital in Korea tends to be “unhealthy.”

Some said that overseas investors may demand higher dividends amid ongoing global uncertainties.

“Foreigners may demand bigger payments to make up for investment losses if the euro zone financial crisis continues,” said Lee Chang-seon at the LG Economic Research Institute.


More in Finance

5-day winning streak ends as Kospi drops 0.62 percent

Debt is the latest hot product being pushed into the market

China's WeChat Pay and Seoul's Zero Pay now interoperable

Kospi sets another all-time high as optimism continues

Kim Kwang-soo named as sole candidate to head banking federation

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now