On the morning of the 10th, shares of financial stocks regarded as high-dividend plays were strong. The gains came after reports that the government and the ruling party had reached common ground on easing the top tax rate for separate taxation of dividend income.
As of 9:35 a.m. that day, Hana Financial Group was trading on the main board at 97,400 won, up 5,400 won (5.87%) from the previous session.
At the same time, KB Financial Group (5.82%), Shinhan Financial Group (4.13%), Woori Financial Group (3.89%), and Korea Investment Holdings (4.36%) were also all higher. In the securities sector, Mirae Asset Securities (6.06%) and Hanwha Investment & Securities (4.58%) were also strong.
With the ruling party and the government moving to ease separate taxation on dividend income, buying appears to be flowing into high-dividend stocks. Park Su-hyeon, senior spokesperson of the Democratic Party of Korea, said in a briefing on the outcome of the high-level ruling party–government meeting on the previous day that they would push a plan to ease the separate taxation rate on dividend income from the government's proposed 35% to 25%.
Park, the senior spokesperson, said, "Regarding measures to enhance the effectiveness of separate taxation of dividend income, we agreed on the need to prepare a reasonable adjustment to the top rate that would maximize the effect of invigorating dividends without significantly affecting tax revenue," and added, "The specific rate level will be decided through deliberations in the regular National Assembly session."