Foreigners Want Trading Fee Exemption
By Lee Hyo-sik
Staff Reporter
Foreign equity investors are calling on the Korean government to exempt them from paying commissions on stock transactions, saying they want to be treated equally to local institutional stock traders.
In a joint investor relations (IR) session for listed companies on the Korea Exchange (KRX) in New York Thursday, a U.S. hedge fund manager based in Wall Street demanded the KRX and other securities-related institutions stop collecting stock trading fees from non-Korean institutional investors.
``It is discriminative against foreign institutional investors in Korea as the government imposes equity trading commissions on foreigners, while exempting Korean institutional investors from the fees,'' he claimed.
Currently, along with the KRX, the Korea Securities Dealers Association, the Korea Securities Depository and the Korea Futures Association charge fees on equity investors when trading stocks.
In response, Kim Kyung-soo, director general of the Institute for Monetary and Economic Research under the Bank of Korea, said the Korean government will consider abolishing the trading commissions levied on foreign institutional investors as part of its efforts to turn the country into a better place to do business for non-Koreans.
During the New York IR session, many U.S. investment bankers and fund managers also asked about how the Korean government and businesses have and will cope with rising oil prices and other worsening external negatives.
Gary Lilley, regional head of Morgan Stanley's Asia-Pacific equity division, said the Lee Myung-bak Administration has and will carry out a range of business-friendly policies, including tax cuts and deregulation, saying Korea's investment environment for foreigners will improve.
Lilley also said many investors on Wall Street see a number of Korean stocks undervalued, saying foreigners will continue to snatch up local shares.
Another fund manager said Wall Street is keeping a close eye on the Korean government's economic policies, calling on President Lee to put his words into action.
In the first joint IR meeting held in London a day earlier, one investor said he will consider buying shares of Hyundai Automotive, LG Electronics and other exporters ― which have and will benefit from the weaker won against the dollar.
The KRX will hold the last joint IR session in San Francisco Friday.