The stocks kids love to buy
Of the 1,895 companies listed on the market, Korea Aerospace Industries was the favorite among investors younger than 18.
The minors owned 4.9 trillion won ($4.37 billion) worth of stocks on the Korean market, according to a report by Minjoo lawmaker Min Byung-doo. That’s 180 million shares, according to the data from the Korea Securities Depository, KEB Hana Bank and KB Kookmin Bank.
Of the 4.9 trillion won worth of shares owned by children, 2.02 trillion won worth, or 41 percent, were invested in Korea Aerospace Industries (KAI). Hanmi Science, the holding company of the pharmaceutical developer Hanmi Pharmaceutical, was second most popular among young investors with 546.4 billion won worth of shares owned by minors. They owned 345.9 billion won worth of LB Semicon, a semiconductor developer. Young investors also are part owners of large caps, including Samsung Electronics, GS and Shinhan Financial Group.
Min’s report showed that the younger the investors were the more stocks they owned.
Children seven or younger held 57.1 percent of the 4.9 trillion won in stocks or investments worth 2.8 trillion won. The stocks that they owned amounted to 80 million shares, or double the amount owned by children eight to 13. In fact, 99 percent of the KAI stocks owned by minors were in the names of children seven or younger.
Children ages eight to 13 owned only 1.4 billion in stock and those ages 14 to 18 owned 2.6 million won worth of shares.
Under the law, minors are permitted to buy stocks with their parents’ permission. Additionally, they are exempt from inheritance taxes up to 15 million won for 10 years, a policy that has drawn critics who say minors’ investments are only increasing their parents’ net worth.
Huh Seok-hong, 16, who is the eldest son of GS Energy Vice President Huh Yong-soo, is the richest by stock holdings among minors. In May, Huh increased his stock ownership when he acquired 30,000 shares of GS that was owned by his grandfather Huh Wan-koo, chairman of Seungsan. As a result, the teenager’s stock has increased from 805,341 shares to 835,341 shares, which have a value of 42 billion won. The recent acquisition was his second in two years.
Min said that these stocks owned by minors affect many young Koreans who will be discouraged from having dreams of moving up the social ladder.
“There is a need of educating rich young children in actively involving in social contributions such as acting out noblesse oblige along with [stock] inheritance,” said Min. “Additionally the financial authorities should closely monitor whether there have been any illegal practices in the process of minors with no income buying stocks.”
BY LEE HO-JEONG [email@example.com]