Kospi nears record 7,000 as Samsung family pay off huge inheritance tax bill
South Korea’s Kospi breached the 6,900 mark for the first time on Monday, after a record rally in semiconductor stocks and the family behind tech giant Samsung paid off its inheritance tax bill.
The index surged 5.1 per cent during Monday trading, closing 6,936.9 points, creeping closer to breaking the 7,000 mark after rallies by heavyweights Samsung and SK Hynix.
Samsung Electronics jumped 5.4 per cent, closing at a high of 232,500 KRW (£116.20), crossing the 230,000 KRW threshold for the first time, with the surge primarily driven by mass foreign and institutional buying caused by strong results from US tech giants.
This led to a boost in optimism for the global semiconductor industry, with analysts noting that it was seen “as a clear sign of accelerating AI adoption”.
Paying the bill
Samsung’s stock and the Kospi were also greatly impacted by the Samsung family paying off its 12 trillion KRW inheritance tax bill, the largest of such settlements in the country’s history.
Chairman Lee Jae-yong and other members of the family, including his mother and sisters, paid the sum in six installments over the last five years.
The bill is tied to the estate left by the firm’s late chairman Lee Kun-hee, who died in October 2020, after he left a 26 trillion KRW (£13.04bn) fortune.
Samsung confirmed on Sunday the final payment has been made, noting the sum is equivalent to roughly one and a half times the country’s total inheritance tax revenue for 2024.
South Korea’s inheritance tax rate is among the highest in the world at 50 per cent.
Stable Samsung
Investors breathed a sigh of relief upon confirmation of the final payment, amid fears that it could affect the Lee family’s ability to retain control of Samsung, with operations spanning electronics, construction and financial services.
Some questioned whether the company would be forced to sell further shares in order to raise capital to pay the bill, with the family consistently selling shares and using credit loans to pay it off.
Jae-yong’s mother sold around 15m shares totalling roughly £1.5bn, in order to meet the final installment.
The family boasts a combined net worth of more than £33bn, according to the Bloomberg Billionaires Index, with their wealth more than doubling in the last year as demand for chips rocketed amid the AI craze, leaving them able to fund the payoffs without greater losses.
SK Hynix
Fellow chipmaker SK Hynix also helped lift the Kospi during trading, rocketing 12.2 per cent to 1,447,000 KRW.
The stock has surged 113.7 per cent this year to date, bolstered by semiconductor demand.
Taiwan’s TAIEX also jumped 4.5 per cent to 40,705.1 points, as the country continues to capitalise on its AI potential, with index leader TSMC increasing 6.5 per cent.
The stock has rallied 43.5 per cent this year to date to 2,275 TWD (£53).