Since the passing of the late Samsung Group Chairman Lee Kun-hee on Oct. 25, stocks of the conglomerate’s seven affiliates, including Samsung Electronics and Samsung C&T, rose 13.8 percent on average, according to data released Monday.
The increase is thought to be driven by expectations of an economic recovery as well as increased dividend payouts to help late Samsung chairman’s heirs pay inheritance taxes.
Samsung Electronics, the crown jewel of the nation’s largest conglomerate, saw its stock price, grow 7.4 percent from 62,000 won ($55.74) on Oct. 23, the last trading day before Lee‘s death, to 64,700 won on Nov. 20. The stock price hit an all-time high of 67,200 won, up 3.86 percent, in the early morning trading session Monday.
Lee, who held 4.18 percent of the tech giant, used to receive the most amount of dividends from the company. Of the entire 470 billion won of dividends he received last year, 350 billion won came from Samsung Electronics.
Construction firm Samsung C&T, of which Lee’ only son Lee Jae-yong holds 17.33 percent, and insurance firm Samsung Life Insurance rose 16.3 percent and 16.4 percent, respectively. The senior Lee held a 20.76 percent stake in the insurance unit.
The two companies, considered key affiliates that help the Lee family sit atop Samsung’s ownership structure, are expected to increase dividend payouts to enable the owner family to pay for high inheritance taxes.
“The stock price increase of Samsung Electronics will hike the value of the chairman’s stake in the company, and the amount of inheritance,” said a market watcher, adding “Investors, therefore, are paying keen attention to key Samsung units, which would offer handsome dividends.”
Battery maker Samsung SDI’s shares soared more than 20 percent while stocks of hotel chain The Shilla and IT solutions firm Samsung SDS increased 5.7 percent and 4 percent, respectively.
Thanks to the recent stock price jump, the stocks owned by the Samsung chairman have reached some 20 trillion won in value.
The late chairman’s stocks have not been passed on to his wife and children yet, as they need to wait for his estate to be settled. The Samsung family heirs are subject to a 60 percent tax rate on the inherited stocks under the nation’s tax and antitrust rules. The amount of inheritance taxes the family has to pay to receive the 20 trillion-won worth of stocks still owned by the late Lee is expected to surpass 11 trillion won.
By Kim Young-won (firstname.lastname@example.org