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What stocks do Koreans buy for their kids?

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 The company logo of Samsung Electronics, a bellwether on the Korean stock market, is seen on the lobby of its headquarters in southern Seoul's Seocho District, Friday. Yonhap

The company logo of Samsung Electronics, a bellwether on the Korean stock market, is seen on the lobby of its headquarters in southern Seoul's Seocho District, Friday. Yonhap

Minors make up 8.38% of Samsung Electronics shareholders
By Yi Whan-woo

The number of underage Koreans who own stocks in Samsung Electronics surged more than 21-fold over the four years through 2023, as more parents are buying stocks for their children to start building wealth in advance, data showed, Monday. They are also turning their eyes to U.S. tech stocks like Tesla and Microsoft on the expectation that they will return huge profits in the long run.

The data compiled by Korea Securities Depository (KSD) showed that 391,869 individuals who were younger than 20 owned stocks in the country's No. 1 electronics giant in 2023.

The number has been increasing steadily from 2019 when it totaled 18,301. It then grew to 115,083 in 2020, 358,257 in 2021 and 431,642 in 2022.

The percentage of Korean minors among Samsung Electronics shareholders also increased from 3.21 percent in 2019 to 5.34 percent in 2020, 7.07 percent in 2021, 7.42 percent in 2022 and 8.38 percent last year.

"The overall number of underage Samsung Electronics shareholders jumped 21.4 times between 2019 and 2023," KSD explained.

It noted the number stood at merely 2,638 in 2010 and that the pace of increase is "dramatic."

Asked why more Korean minors are owning the bellwether stocks, KSD assessed more parents find financial education crucial for their children at an earlier age as the finance sector is growing in the country.

By age, those in their 40s made up 22.04 percent of Samsung Electronics stock owners. Those in their 30s accounted for 21.1 percent, followed by those in their 50s at 20.8 percent, those in their 60s at 11.83 percent and those in their 20s at 11.64 percent.

In the meantime, parents are increasingly buying blue chip stocks abroad as they are more prospective and profitable than their Korean peers, according to the brokerages.

"For instance, the parents offload Samsung Electronics shares in order to buy Tesla and Microsoft shares, as well as those listed on S&P 500," a source at a local brokerage said, referring to 500 of the largest companies listed on U.S. stock exchanges.

He added that companies in the artificial intelligence industry, such as Nvidia, are also getting notably popular.

A U.S. AI chip manufacturer, Nvidia posted a profit of $14.88 billion in the first quarter of 2023, up 629 percent compared to the corresponding quarter in 2023.

He speculated more parents are likely to buy overseas stocks for their children over the next several years, as access to stock market information is becoming easier.

Yi Whan-woo yistory@koreatimes.co.kr


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