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Biz News Korea(Eng)
Lotte Confectionery’s stock split may lead other blue chips to follow suit
- Collected
- 2016.03.11
- Distributed
- 2016.03.14
- Source
- Go Direct
In Seoul trading on Thursday, Lotte Confectionery hit an intraday high of 2,943,000 won, up 4.9 percent from the previous session before closing down 2.3 percent at 2,743,000 won. The company’s stock rally began after it announced Monday that it will split the face value of its share from 5,000 won ($4.16) to 500 won to attract more retail investors. Its stocks surged 9.4 percent to end at 2,806,000 won Wednesday, increasing its market capitalization to 3.99 trillion won, which is 600 billion won higher than 3.38 trillion won tallied on Mar. 4. This proves a stock split could be an attractive means to entice investors’ appetite for stocks, and split stocks would bode well for share prices as they become more accessible to retail investors.
Last year, Korean cosmetic giant Amore Pacific Co. also enjoyed much from a stock split. Following its 10-to-1 stock split on Mar. 3 last year, the cosmetic name’s market capitalization ballooned 40 percent.
Market experts now pay attention to whether Lotte Confectionery’ stock split could bring in more retail investors like Amore Pacific. Lotte’s success could trigger other Korean blue chip food companies such as Ottogi Corporation and Orion Corp. to take similar steps, predicted an unnamed industry source.
By Yong Hwan-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]