SEOUL: South Korea's mom-and-pop investors are defying last week's global financial markets rout by pouring even more funds into US stocks, a years-long trend that analysts and investors bet will continue due to the depressed value proposition at home.
For South Korean listed companies, the last 10-year ratio of dividend payment to net income, for instance, stood at an average of 26 per cent, lower than 55 per cent in Taiwan, 36 per cent in Japan and 42 per cent in the US, according to the Financial Services Commission. Ants like Noh bought US$9 billion worth of US stocks between January-July this year, after selling US$2.8 billion in 2023 - the first sell-off after three years of a US stock investment boom. They sold a record-high 16.3 trillion won worth of domestic stocks in the same period, driving the KOSPI down 1.3 per cent so far this year when the S&P 500 and Nikkei jumped 13 per cent and 5 per cent, respectively.
"The kind of dividend payout and shareholder return trend I see in US companies is simply hard to spot in Korea," he said. Noh and Oh are part of a group of eight analysts, investors and government officials who told Reuters they expect the fund-outflows trend to continue as an ageing population seeks higher returns.