[Special Stock] Securities Stocks Rally on Expectations of Separate Taxation for Dividend Income

On July 9, securities stocks are showing strong performance due to expectations that the introduction of separate taxation on dividend income will be further pursued following the passage of the Commercial Act amendment.

As of 10:27 a.m. on July 9, Bookook Securities was trading at 60,600 won, up 13,950 won (29.90%) from the previous trading day.

At the same time, other securities stocks such as SangSangIn Securities (19.86%), ShinYoung Securities (15.49%), Daishin Securities (11.40%), Mirae Asset Securities (8.45%), and LS Securities (8.33%) were also strong across the board.

Last month, President Lee Jaemyung visited the Korea Exchange and cited the income tax law amendment proposed by Lee Soyoung, a member of the Democratic Party of Korea, as an example. The amendment includes a provision to apply a separate tax rate to dividends from listed companies with a dividend payout ratio of 35% or higher, separating them from comprehensive income. President Lee also emphasized as a campaign pledge the mandatory cancellation of treasury shares to prevent controlling shareholders from abusing them for personal interests such as defending management rights.

Yoon Yudong, a researcher at NH Investment & Securities, stated, "Further amendments to the Commercial Act, such as the introduction of cumulative voting and institutionalization of treasury share cancellation, as well as tax law revisions including separate taxation of dividends and inheritance tax, are expected in the future." He added, "If all shareholder return enhancement bills are implemented, it is highly likely that the overall shareholder return policy will be strengthened, with both an increase in corporate dividend payout ratios and the institutionalization of treasury share cancellation taking place simultaneously."

He further emphasized, "This will create a favorable investment environment for the securities industry, which has a high capacity for dividend payments, and is expected to deliver a triple effect of dividend expansion, treasury share cancellation, and tax benefits."