Capital Group, one of the world's largest asset managers, has acquired a more than 5 percent stake in South Korean tobacco company KT&G, adding its name to a growing list of heavyweight foreign shareholders.
In a regulatory filing Friday, KT&G disclosed that Capital Research and Management Company, the investment management arm of the group, had acquired a 5.61 percent stake through purchases made on April 22 and May 4.
The move places Capital Group among KT&G's prominent foreign shareholders, alongside BlackRock, First Eagle Investment Management and Singapore's sovereign wealth fund GIC.
KT&G shares rose to a record high of 183,500 won ($125) on the day, closing above the 180,000 won mark for the first time, as foreign buying of Korean equities continued. Foreign investors now hold 45.5 percent of KT&G's outstanding shares.
The interest comes as KT&G posts stronger earnings on the back of overseas cigarette sales.
First-quarter revenue rose 14.3 percent from a year earlier to 1.7 trillion won, while operating profit climbed 27.7 percent to 364.5 billion won. The company pointed to its expanding international business as the engine of growth and reaffirmed its commitment to shareholder returns, including higher dividends.
“KT&G is expected to continue delivering industry-leading shareholder returns through additional share buybacks and cancellations in the second half, while overseas cigarette sales remain robust," said an analyst at NH Investment & Securities.
minmin@heraldcorp.com
