SEOUL, Nov. 16 (Korea Bizwire) –South Korean listed firms’ dividend payouts to foreign investors jumped more than 20 percent in the first nine months of the year due mainly to increased earnings, central bank data showed Thursday.
Local listed companies paid foreign investors US$14.09 billion in dividends in the January-September period, up 20.5 percent from a year earlier, according to the data from the Bank of Korea. This is a record high for the first three quarters of any year, with the growth rate ranking as the highest since the 53.2 percent increase recorded in 2005.
Given the current trend, the full-year dividend payouts to foreign investors are on pace to reach an all-time high this year, watchers said. Dividend payments to offshore investors hit a high of $15.49 billion in 2010.
Foreign investors received dividend payouts of $9.34 billion from their direct investments in local companies, up 12.6 percent from the previous year, with the rest coming from stock purchases. Dividend payouts from equity investments surged about 40 percent on-year.
The jump in dividend payouts to foreigners was attributed mainly to increased corporate operating profit during the cited period.
According to the Korea Exchange, 525 companies listed on the main stock market, excluding financial firms, posted a combined operating profit of 120.5 trillion won ($109 billion) during the nine-month period, up 28 percent from the same period a year earlier.
Also responsible was a government measure to encourage companies to pay out retained earnings in dividends, which led to an increase in the so-called dividend payout ratio, the percentage of earnings paid to shareholders in dividends.