IHS Markit, a specialist in critical information, analytics and solutions, has launched two new stock indices – KRX-IHS Markit KOSPI 200 Dividend Forecast Yield Top 30 and KRX-IHS Markit KOSPI 200 Dividend Forecast Growth Top 30 – in alliance with Korea Exchange (KRX).
The KRX-IHS Markit indices enable exchange-traded funds (ETFs) and other market participants to track publicly traded Korean companies with the strongest dividend prospects based on IHS Markit research. Both indices are derived from the KOSPI 200, the flagship KRX index, using the forward-looking figures of Top 30 dividend performers.
“Integrating IHS Markit dividend forecasting into the stock selection process is a natural progression for smart beta indices,” says Sang Hwan An (pictured), president and CEO of the Management Strategy Division at KRX. “By measuring the potential for future performance, these new indices provide investors with an opportunity to upsize dividends.”
In 2014, the Korean government introduced a profits tax to promote more progressive dividend polices and transparency in cooperate governance. Since then, nearly half of all blue-chip KOSPI 200 firms increased dividends by more than 10 per cent. For 2017, the IHS Markit Dividend Forecasting team is projecting an estimated collective 16 per cent dividend increase from KOPSI 200 firms.
“The recent growth in Korean dividends inspired us to collaborate with KRX on an innovative approach for index-based investing that can offer a strong value for ETFs with Korean exposure,” says Pierre Khemdoudi, managing director of securities finance at IHS Markit. “As the IHS Markit dividend forecasting team continues to measure dividend growth trends in other global markets, we plan to launch additional indices based on forward-looking data.”