Park Hyeon-joo, chairman of Mirae Asset Financial Group, pushed back against claims that Samsung Electronics (005930) and SK hynix (000660) shares have lagged because of disappointing shareholder return policies. He argued instead that aggressive investment to strengthen corporate fundamentals through capital accumulation must come before heavy dividend payouts if a second Samsung Electronics or SK hynix is to emerge.
Park made the remarks at a dinner with Digital X employees held at the Four Seasons Hotel in Seoul's Jongno district on the 26th, according to financial investment industry sources on the 27th. "The idea that share prices fall because a company pays large dividends is a flimsy argument," he said. "What matters is the fundamentals." Park added: "Shareholder returns amount to only 5 to 7% — you would be better off buying U.S. Treasuries. Would Samsung Electronics or SK hynix have come into being if they had paid out large dividends?"
Stressing corporate competitiveness, Park said: "Would companies like that have come into being if they had paid large dividends in the past? Companies that accumulate capital and invest boldly are the ones that succeed." He added that investment should serve the country as a whole, saying that whether semiconductors are built in the Honam region or not is beside the point.
From that standpoint, he signaled that Digital X will not consider a dividend policy for the time being even if it turns a profit next year. "Should Digital X pay a dividend if it makes money?" he said. "It should not."
Park forecast that the government's recently announced overhaul of real estate taxation will accelerate a money move from property-centered investment into capital markets. "I think we have to stop the situation where simply holding real estate makes prices go up," he said. "Only then can younger generations live with a sense of well-being. The era of making money from real estate must now end."
He suggested the tougher tax plan could shift demand from property into capital markets. "If you don't sell your real estate, you face 100 million won in holding taxes — how could anyone hold out?" Park said. "There is no longer a way to make money that way, so we have to guide investors in good directions through a variety of means." He added: "Based on real estate taxation, returns have fallen back to 2018 levels and are worse than buying KOSPI stocks, so perceptions will properly change."
Park also expressed regret over single-stock leveraged exchange-traded funds listed in Korea, arguing that rebalancing by foreign investors did more to amplify market volatility than the products themselves. "It is wrong to say that leveraged ETFs increased volatility," he said. "The damage was done by foreign leveraged ETFs, and it was foreign investors rebalancing."
He added: "Domestic leveraged ETFs amount to only 13 trillion won, while leveraged ETFs abroad that we cannot control amount to about 40 trillion won. I did think it would be good to have leveraged ETFs here so that we could exercise some control."
On foreign media comparing volatility in Korean equities to a casino following the launch of single-stock leveraged ETFs, Park said: "When you see them selling everything and pulling their money out, it feels unfair."
