The average price gap between common and preferred stocks of major South Korean companies dipped to its lowest in a decade as investors and funds bought up equities tied to better dividends, data showed Friday.

Preferred stocks are generally traded at cheaper prices than common stocks because they offer no voting rights and have low turnover rates.

But after the new economic team began pressing conglomerates to pay higher dividends, investors turned to these cheaper stocks, which are given priority over common stocks in dividend payouts.

According to data analyzed by Samsung Securities, the average discount rate for 40 key preferred stocks fell to 33 percent on Sept. 11. The rate is the lowest since data started being collected in 2005 and is nearly half of the 61.5 percent peak in April 2009.

The discount rate has remained in the 30 percent range since the new Finance Minister Choi Kyung-kwan, who took office in July, introduced measures that in effect force companies to increase dividend payouts to shareholders with the ultimate aim of raising household income to boost consumption. (Yonhap)