The Korea Times

Jun Kwang-woo’s roll of dice

National Pension buying up overseas properties but will it pay off? By Kang Seung-woo The state-run pension fund’s overseas investments this year have soared nearly nine times since the global financial crisis, in efforts to diversify its asset portfolio. But observers are concerned over its active drive amid the current financial turmoil, sparked by the Greek debt problems. According to industry data, the National Pension Service (NPS) invested 5 trillion won ($4.26 billion) in overseas properties as of the end of the first half of 2011, up from 564.2 billion at the end of 2008, when the bankruptcy of Lehman Brothers hit the global economy hard. Since then, the NPS’s investment in foreign real estate has been on the rise, as it spent 2.44 trillion won in 2009 and 4.10 trillion won in 2010. The public pension fund owns the Sony Center in Berlin, the HSBC headquarters building in London’s Canary Wharf, KDX Toyosu Grandsquare in Tokyo and Aurora Place in Sydney. Recently, it purchased a 49 percent stake in the Helmsley Building in Manhattan. The NPS, headed by Chairma

Oct 12, 2011By Kang Seung-woo

Companies

Big brokerages gearing up to be IBs

By Kang Seung-woo Big brokerages have started to bulk up in their bid to become a Goldman Sachs-style investment bank (IB). They are striving to raise funds to meet the financial regulator’s requirement of 3 trillion won ($2.58 billion) in equity capital to qualify as “a comprehensive financial investment company. Daewoo Securities leaped ahead by coming up with a plan for a large-scale capital increase. Korea’s third-largest brokerage by equity capital, Daewoo announced last month that it will raise its capital by 1.4 trillion won by issuing 136.6 million new common shares aiming to rank as a global investment bank. Samsung Securities and Woori Investment and Securities, the nation’s Nos. 1 and 2 players by equity capital, followed Daewoo and increased their capital by 400 billion won and 600 billion won apiece. Not to be left out of the race, Hyundai Securities and Korea Investment and Securities, which round up the top five stock trading companies in the local stock market, are also expected to announce capital increases although they are keeping mum about specific

Oct 11, 2011By Kang Seung-woo

Companies

W10,000 minimum eyed for credit card

By Kang Seung-woo The government is considering raising the lower limit of the amount permissible to charge to a credit card. The minimum transaction under consideration is 10,000 won or $8.54. The introduction of the limit is aimed at addressing grievances of shops and restaurants that have to pay hefty fees. Opposition is quite strong from consumers who claim it is an act of bureaucratic convenience without first having to make credit card firms lower their surcharges. The Financial Services Commission (FSC) is considering amending a pertinent rule on grounds that card-affiliated shops and restaurants must shoulder a heavy commission burden. “It is time to consider scrapping or easing the regulations on financial transactions involving very small sums of money,” FSC Chairman Kim Seok-dong said last week during a parliamentary audit and inspection. The smallest transaction possible might be settled at around 10,000 won, following practices in the United States and Canada, where merchants can reject cards for sales under $10. According to a current regulation of

Oct 10, 2011By Kang Seung-woo

Companies

Big hurdle cleared for KEB sale

By Kang Seung-woo The Seoul High Court Thursday found Paul Yoo, a former executive of Lone Star, guilty of engaging in stock manipulation in the Texas-based buyout firm’s 2004 acquisition of Korea Exchange Bank (KEB)’s credit card unit. The court sentenced Yoo to a three-year jail term and also fined Lone Star 25 billion won (about $21.2 million). However, the court overturned an earlier conviction on KEB over its alleged involvement in the stock-price rigging and declared it not guilty Ironically, the ruling may clear the last hurdle in Lone Star’s six-year quest to sell its 51 percent stake in KEB. The Financial Services Commission (FSC), the regulator, said that it may have to tell Lone Star to sell most of its KEB stake following Yoo’s conviction. Lone Star inked a $4 billion-plus agreement to sell its shares in KEB to Hana late last year. But the FSC had delayed reviewing the deal, opting to wait for the results of Yoo’s retrial after the Supreme Court overturned a 2008 not-guilty verdict in March. With the sale left in limbo, Lone Star and Hana were forced t

Oct 6, 2011By Kang Seung-woo

Companies

Bahk cautions against overreaction

By Kang Seung-woo The finance minister said Wednesday that the Korean financial market is overreacting to Europe’s sovereign debt crisis. “Financial and currency markets are responding sensitively to external fear factors," Strategy and Finance Minister Bahk Jae-wan said in a weekly crisis management meeting amid growing uncertainties in the eurozone. “Though the real economy remains on its recovery track and the employment situation is improving, there are signs of a slowdown based on sentiment-related data.” His remarks come as the local stock market was hit hard Tuesday amid intense concerns with the ongoing impasse over Greece’s debt problem and a possible ripple effect on neighboring countries and the global economy. Worse, Italy on Tuesday had its credit rating cut three notches by Moody’s. The benchmark Korea Composite Stock Price Index tumbled 63.46 points, or 3.59 percent, to 1,706.19 on the first trading session of the week (it was closed Monday for National Foundation Day), while the local currency closed at 1,194 won against the U.S. dollar, losing 15.9 w

Oct 5, 2011By Kang Seung-woo

Companies

IMF expects Korean income to rise to $30,000 in 2015

By Kang Seung-woo Korea is estimated to attain $30,000 in per capita gross domestic product (GDP) for the first time by 2015, according to the International Monetary Fund (IMF) Tuesday. In addition, purchasing power parity-based per capita GDP is expected to surpass $40,000 in 2016. The recent World Economic Outlook Database of the IMF forecast that the per capita GDP of the nation will grow to $31,733 in 2015. Korea, Asia’s fourth-largest economy, managed to reach the $20,000 level, at $20,756, last year and is estimated to reach $23,749 this year. The Washington-based organization also forecast that the nation’s per-capita GDP will be on a steady rise, as it is likely to attain $25,948 in 2012, followed by $27,702 in 2013 and $29,652 in 2014, to reach $33,948 in 2016. The next year’s reading for per capita GDP was ranked 28th out of 34 advanced economies, including France, Germany, Japan and the United States, and it will move up by two notches in 2016, the IMF said. Among the 34 countries, Luxembourg topped the list for next year’s per capita GDP with $126,32

Oct 4, 2011By Kang Seung-woo

Companies

Small firms troubled by cash shortage

By Kang Seung-woo Listed small- and medium-sized enterprises (SMEs) struggled with cash shortages in the first half of this year amid the faltering economic recovery, a non-profit organization said Monday. The nation’s top-10 business groups added more cash to their wallets during the same period. According to the Korea Listed Companies Association (KLCA), the cashable assets of Korea’s 632 listed companies stood at 48.13 trillion won ($40.76 billion) as of the end of June, compared with 52.94 trillion won at the end of last year, a 7.6 percent contraction. In addition, the cashable assets per company also took a downturn in the cited period from 82.4 billion to 76.2 billion won. Cashable assets cover cash, bank deposits, cash equivalents and other short-term financial instruments that could be readily turned into cash within three months. The KLCA said that among 128 firms that saw their cashable assets drop by more than 50 percent, only 10 companies, including NHN, the Internet industry giant that operates Naver (www.naver.com) and Hangame (www.hangame.com), and Hyu

Oct 3, 2011By Kang Seung-woo

Companies

Korea’s CDS premium jumps in September

By Kang Seung-woo The cost of insuring Korea’s sovereign debt against a default rose dramatically in September, according to a state-run think tank Sunday. The heightened uncertainty surrounding the eurozone debt problems and the sluggish U.S. economy continue to fuel uneasiness about Korea’s financial stability. The credit default swaps (CDS) premium on Korea's five-year foreign currency bonds, which reflects the cost of hedging credit risks on sovereign debt, closed at 219 basis points on Friday, up 91 basis points from Aug. 31 and 24 basis points from the previous day. The latest figure represents the highest level since 246 basis points posted on May 1, 2009, and the largest one-month jump since October 2008, when the rate leapt nearly 100 basis points following the collapse of the Lehman Brothers, the Korea Center for International Finance (KCIF) said. A basis point is 0.01 percentage point. Credit default swaps are derivative contracts traded on the over-the-counter market that work as insurance to protect lenders against loan defaults. The more concern market play

Oct 2, 2011By Kang Seung-woo

Companies

POSCO building stainless steel plant in Turkey

By Kang Seung-woo IZMIT, TURKEY _ POSCO broke ground Wednesday for its $350 million cold-rolled stainless steel plant in Izmit, Turkey as part of its efforts to become a leading stainless steel maker in the region. The plant, scheduled to be completed in April 2013, will have an annual capacity of 200,000 tons. It is the steel giant’s second investment in Turkey, following the launch of its POSCO-Turkey Nilufer Processing Center (TNPC), a comprehensive auto steel processing center, in Bursa Province last year. “The plant will be equipped with one of the finest cutting-edge facilities in the world and is expected to stably produce solid cold-rolled stainless steel,” POSCO Chairman Chung Joon-yang said during the ground-breaking ceremony, where Turkey’s Minister of Science, Industry and Technology Nihat Ergun and Economy Minister Zafer Caglayan were present. The chairman also said that the building of the stainless steel plant will help Turkey improve its trade balance, as production from the new plant will replace its imports. Currently, the Pohang-based company, w

Sep 29, 2011By Kang Seung-woo

Companies

TNPC prepares POSCO for Euro expansion

By Kang Seung-woo NILUFER, TURKEY — POSCO is pushing to beef up its portfolio as a premium auto steel supplier. The POSCO-Turkey Nilufer Processing Center (TNPC) is solidifying the company’s presence to extend its reach across the lucrative European region. The comprehensive auto steel processing center, which has an annual production capacity of 170,000 tons of automotive steel, is the Korean steel giant’s first processing facility specializing in the metal in Europe. Blossoming in northwest Turkey, the world’s No. 3 steelmaker broke ground for the plant in November 2009 and construction was completed in October last year in the Hasanaga Industrial Complex in Bursa Province. Turkey has seen its economy grow steadily in recent years thanks to its geographical location as a bridge between Europe and Asia. Bursa, in which Nilufer is located, has become a key industrial area, as it features major infrastructure such as expressways and ports linking important Turkish cities, including Istanbul, Ankara, and Izmir. The northwestern part is a key car production base f

Sep 27, 2011By Kang Seung-woo

Kang Seung-woo

Read more

Jun Kwang-woo’s roll of dice

Big brokerages gearing up to be IBs

W10,000 minimum eyed for credit card

Big hurdle cleared for KEB sale

Bahk cautions against overreaction

IMF expects Korean income to rise to $30,000 in 2015

Small firms troubled by cash shortage

Korea’s CDS premium jumps in September

POSCO building stainless steel plant in Turkey

TNPC prepares POSCO for Euro expansion

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