Foreign investors have been gobbling up securities of Korean holding firms with favorable corporate governance structure that can generate steady dividends.

According to South Korean securities exchange operator Korea Exchange (KRX) Monday, the top buy of offshore investors was Posco, with their total net buying during five months from Oct.1 to Feb. 27 reaching 1.2 trillion won ($1.08 billion). The buying spree from the beginning of the year until Monday totaled 426.1 billion won. Its stocks on Tuesday ended at 283,500 won, up 1.25 percent from the previous session.

Posco is only one among the nation’s top 10 conglomerates to have no single major shareholder and boasts an advanced governance structure overseeing 39 units. It is praised for its outside directors and pays dividends on a quarterly basis, moves seen as shareholder friendly. Despite its disappointing performance in the fourth quarter ended December last year, it remained offshore investors’ favorite buy in the Korean bourse.

A snack maker Orion Corp. that plans to split itself into two separate holding and operating companies in June saw its share price jump 16.2 percent from 624,000 won on Jan. 2 to 725,000 won in Monday’s closing, with overseas net buying reaching 42.1 billion won. Foreign shareholding ratio rose from 40.83 percent in November to current 42.28 percent. Its stocks closed Tuesday at 714,000 won, down 1.52 percent from the previous closing.

Han Gook-hee, an analyst at NH Investment & Securities Co., said the split would allow Orion to use funds more effectively to pay debts and allocate investments. Its shareholders’ value would also improve as dividend payouts from overseas operations and holding firm are expected to rise.

LG Corp., which was the nation’s very first to separate the group into two separate holding and operating entities in 2003, also was one of the offshore investors’ favorite picks, with their net buying between early this year and Monday totaling 22.2 billion won on expectations for earnings improvement in its key subsidiaries LG Electronics Inc. and LS Corp., which has boosted its share price 5.2 percent. In particular, offshore investors’ net buying of LS reached 13 billion won during the same period, sending its share price up 11.3 percent.

Shares of LG Corp.ended Tuesday at 62,800 won, up 0.16 percent, while LS stocks closed at 67,800 won, up 1.8 percent from the previous session.

By Kim Dae-gi and Chung Woo-sung

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