Block trades of South Korean listed shares so far this year surged by six times from a year ago, according to the Financial Supervisory Service (FSS) on Sunday. Shareholders rushed to sell their stocks as the regulations on block deal disclosures will be tighter in July, which could slash stock prices by the time of selling. A total of 4.
82 trillion won ($3.5 billion) worth of listed shares was sold in block trades from Jan. 2 to May 16, according to FSS data.
Samsung Group family’s divestment of shares in some group affiliates made up about 65.2% of the block deals. The block trades soared about six times from 687 billion won worth of sales for the first five months of last year.
Market insiders said that key shareholders of listed firms completed their block deals earlier this year before the implementation of the , which will oblige them to disclose their plan to sell 1% or more stake in a company at least 30 days before the transaction to protect minor shareholders from heavy losses. The revised law will go effective from July. The major shareholders rushed block deals as they expected that under the revised law, stock prices would start declining after the disclosure and cause little capital gain or even a loss when they sell the securities, market insiders added.
So far this year, a majority of the block trades on the main Kospi were led by conglomerates’ family owners who need cash for inheritance or gift taxes. Samsung Group heiress and Hotel Shilla Chief Executiv.
