Korean firms retire $8.61 billion worth of treasury shares in past three years

[Photo by MK DB]

Listed companies in South Korea have retired a total of 11 trillion won ($8.61 billion) worth of their treasury shares over the past three years in response to growing demand to improve shareholder value.

According to the Korea Exchange data, treasury share retirement among companies listed on the Kospi and Kosdaq exchanges reached 11 trillion won during the last three years from 2020 to Feb. 10. The tally reported for 2021 and 2022 was 2.54 trillion won and 3.14 trillion won, respectively. The amount of treasury shares retired in 2020, when the pandemic started, reached a record 4 trillion won.

Retirement of treasury share this year was 11 cases, worth 1.27 trillion won.

Companies that announced a buyback plan include Hyundai Motor Co., KB Financial Holding Co., Meritz Fire & Marine Insurance Co., Shinhan Financial Holding Co., Hana Financial Holding Co., KT Corp. and Poongsan Holdings Co. Among Kosdaq-listed companies are YMC Co., Hy-Lok Co. and GnBS Engineering Co. are on the list.

Retiring treasury shares is a key shareholder return policy. When the buyback shares are cancelled, the number of outstanding shares decreases while earnings per share increases, usually leading to a rise in the share price.