Kospi hits another new high as investors look for year-end dividends

The screen at the dealing room at Hana Bank's main branch in central Seoul shows the benchmark Kospi closed at 2,808.60 on Monday, up 0.06 percent from the previous trading day. It is a new record for the index. [YONHAP]

Seoul's main bourse, which passed 2,800 for the first time last week, hit new highs Monday as institutional investors went on a buying spree in expectation of year-end dividends.

Monday was the last day for investors to purchase stocks in order to receive year-end dividends.

The benchmark Kospi closed at 2,808.60, up 0.06 percent, or 1.74 points, compared to the previous trading day.

The index had soared to as high as 2,834.59 during intraday trading, but retreated as retail investors offloaded 932.8 billion won ($851 million) of stocks in an attempt to avoid paying stock transfer taxes and to seek year-end profits.

Investors with 1 billion won or more worth in a single company's stocks by close on Monday were subject to taxation.

Despite the selling spree by retail investors, institutional investors pulled up the index by purchasing 857.7 billion won worth of shares while foreign investors net bought 46.7 billion won shares.

Top market cap Samsung Electronics was especially popular with investors looking for year-end dividend payouts.

The chipmaker grew 1.16 percent to close at 78,700 won on Monday after hitting as high as 80,100 won during trading. It is the first time the company's shares have passed 80,000 won.

On the previous trading day on Friday, its shares jumped up 5.28 percent.

Analysts are expecting a large dividend payout from the chipmaker as 2020 is the final year of the company's three-year shareholder return program that promises to use at least half of its free cash flow for shareholder returns via purchase or retirement of stocks or through special dividends.

Special dividends are also a way for Samsung's owner family to secure money to pay over 11 trillion won in inheritance tax following the death of late Chairman Lee Kun-hee.

"We are expecting the company to expand dividend payouts as much as possible," said Kang Hyun-jung, a researcher from Kyobo Securities.

"Samsung Electronics will account for some 44 percent of total dividends paid out by domestic companies in 2020, taking into account special dividends expected to be around six trillion won," said Lee Kyoung-min, an analyst from Daishin Securities.

Despite the boost to Samsung Electronics, most of the top blue chips actually lost.

Chipmaker SK hynix fell 2.12 percent to close at 115,500 won, chemical maker LG Chem lost 0.49 percent to 814,000 won and pharmaceutical company Samsung Biologics lost 0.63 percent to 789,000 won. Celltrion tumbled 4.03 percent to 333,500 won.

Hyundai Motor added 1.34 percent to close at 189,500 won.

The Kosdaq index fell 0.18 percent to close at 927.00.

Seoul's stock market closes on Wednesday and will reopen for trading on Jan. 4.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]