The Korea Times

Contribution What ails Korea's housing market?

Chunyu Yang, researcher at ASEAN+3 Macroeconomic Research Office (AMRO). Courtesy of AMROBy Chunyu Yang Since 2018, Korea has witnessed rapidly rising housing prices, particularly in the Seoul metropolitan area, resulting in growing concerns among policymakers and homeowners alike. Housing prices in Korea have increased by nearly 20 percent since January 2020, and a house can now cost more than 10 times the average annual household income. The problem is even more acute in the Seoul metropolitan area with housing prices rising by almost 25 percent in the same period, far outpacing many Asian metropolises such as Beijing, Hong Kong, and Singapore.The accompanying rise in household debt and potential risks of a housing price correction may pose serious challenges for the government, if not checked. At the same time, dreams of home ownership seem increasingly distant for people, particularly the younger generation.Reasons for the surgeOne key problem is the supply-demand gap. The number of households has grown faster than the population over the past 20 years, implying the average size

Oct 23, 2021By Lee Kyung-min

[Contribution] What ails Korea's housing market?

Economy

Kakao Pay IPO clouded by overhang, overvaluation issues

KakaoPay CEO Ryu Young-joon. Korea Times fileBy Lee Kyung-min Kakao Pay, the payment subsidiary of IT giant Kakao Corp, is coming under stock overhang pressure, due to the possible release of up to over 37.12 million shares held by Alipay, an online payment platform operated by China's Ant Financial upon Kakao Pay's planned initial public offering (IPO) next month.Overhang is whereby a sizeable block of shares released for sale leads to a steep decrease in the stock price, mostly triggered by institutional investors with a large holding. A recent report by Kakao Pay showed that over 11.67 million shares and 2.22 million shares both held by Alipay will be locked up from sales for six months and one year, respectively, upon the IPO. The combined 13.89 million shares account for 10.65 percent of Kakao Pay's total shares. They are part of over 51 million shares, or 45 percent, held by Alipay, following an equity financing of $200 million (235 billion won) from Ant Financial in April 2017.Market watchers say Alipay could offload the remaining 37.12 million shares, immediately after the pa

Oct 22, 2021By Lee Kyung-min

Kakao Pay IPO clouded by overhang, overvaluation issues

Economy

Reporter's Notebook Korea asked to speed up discussion on bitcoin ETF launch

Financial Services Commission Chairman Koh Seung-beom. Korea Times fileLegislation needed for clear definition of 'virtual asset,' scope of industryBy Lee Kyung-min The recent launch of bitcoin futures exchange-traded funds (ETF) in the U.S. is a stark reminder of how far Korea is lagging behind its global peers in discussions over the development of a digital financial market, bogged down in large part by nervous policymakers, regulators and legislators questioning the validity of digital currency.The absurdity of the unified stance of the Financial Services Commission (FSC) and the Ministry of Economy and Finance is highlighted further by their unwavering move to tax gains from crypto trading. The issue barely occupies the mind of the Bank of Korea, which is treating it as no more than a financial stability risk factor.Still lacking, all the while, is a clear definition of cryptocurrencies, including whether they should be recognized financial assets or whether they are a valid investment vehicle at all ― let alone the scope of the industry and its responsibilities. A dozen bills s

Oct 22, 2021By Lee Kyung-min

[Reporter's Notebook] Korea asked to speed up discussion on bitcoin ETF launch

Economy

IMM PE primes pump for Able C&C deal

Shin Yoo-jungBy Lee Kyung-min IMM Private Equity (IMM PE) is accelerating efforts to bolster the corporate value of Able C&C, a Seoul-based cosmetics and household goods manufacturer, in hopes of turning the loss-reporting firm into another success story in the local mergers and acquisitions (M&As) market, following Hollys Coffee.Able C&C said Thursday that it has appointed Shin Yoo-jung as head of its brand strategy department overseeing product development, platform operation, marketing and direct-to-consumer (D2C) marketing. The private equity firm expects a performance equally stellar or even greater by the former CEO of Hollys F&B, or Hollys Coffee, who played a key role in the successful sale of the coffee franchise to KG Group in 2020 alongside the current Able CEO Kim Eugene. Kim is Shin's prodecessor at Hollys.Kim EugeneShin's previous experience includes a variety of consumer satisfaction enhancement initiatives encompassing marketing, development, employee training and quality management. She completed post-merger integration as Hollys CEO for the 10 month

Oct 21, 2021By Lee Kyung-min

Law & Crime

Influencers, platform operators under audit for tax evasion

National Tax Service officials hold a press briefing at the agency's headquarters in Sejong, Thursday. Courtesy of National Tax ServiceBy Lee Kyung-min The country's tax authorities have begun investigating high-profile figures over suspected tax evasion.The National Tax Service (NTS) said Thursday that it has initiated a tax audit into 74 people, including “influencers” and online platform operators. Included are 16 influencers who deliberately either underreported their earnings using overseas accounts or failed to report income from advertisers.Their followers average 5.49 million. The most popular figure had more than 10 million followers. However, the NTS did not reveal the names of the influencers or online platform operators currently being targeted. They are suspected of having avoided paying taxes by giving their incomes to their relatives to buy real estate and by reporting money spent to buy “supercars” as car rentals classified under business expenses, eligible for tax deductions. In one example presented by the NTS, a man failed to register himsel

Oct 21, 2021By Lee Kyung-min

Influencers, platform operators under audit for tax evasion

Economy

Tailim Paper IPO draws controversy

Stacks of corrugated sheets of cardboard. Korea Times fileBy Lee Kyung-min Criticism is mounting against a planned bid for an initial public offering (IPO) by Tailim Paper, a delisted corrugated cardboard manufacturer blasted for its widely undervalued share price and high dividend payouts upon delisting in 2016.Minority shareholders claim they were essentially forced to sell their shares at around only a fourth of the market price, in what they consider abuse of a tender offer by IMM Private Equity. The local private equity fund (PEF) acquired the Gyeonggi Province-based manufacturer and its shipping affiliate in July 2015 for 400 billion won ($340 million) and sold it to Sae-A, an apparel manufacturer, for 730 billion won in 2019. The deal was inked after the PEF, with over a 95-percent stake, exercised a put option in November 2017 to sell the remaining 5 percent of shares held by retail investors at a per-share price of 3,600 won, far lower than then market price in the mid-10,000 won area. Many minority shareholders had no choice but to follow. This was because the commercial la

Oct 20, 2021By Lee Kyung-min

Economy

Contribution Climate Response Fund's effectiveness will be determined by 'how well it is spent'

Jón Blöndal, head of the Public Management and Budgeting Division, OECD / Courtesy of Ministry of Economy and FinanceBy Jón BlöndalAs the COVID-19 pandemic has unfolded with its severe economic and social implications, OECD governments have responded with unprecedented fiscal resources to support businesses and families in order to mitigate its effects. Korea has been especially resourceful in its use of budget measures in this regard. In fiscal terms, Korea came into the COVID-19 crisis in an enviable condition compared to many other OECD countries. Korea has a long-established and admired record of fiscal responsibility and enjoys one of the lowest debt-to-GDP levels in the OECD. Korea has also invested in the modernization of the institutions, processes and tools it uses to allocate and manage the budget.As a result, Korea was able to deploy very large resources due to its low debt ratio, and to allocate them effectively at very short notice to the areas where they were most needed, due to its modern system of budgeting.As the COVID-19 pandemic ab

Oct 20, 2021By Lee Kyung-min

[Contribution] Climate Response Fund's effectiveness will be determined by 'how well it is spent'

Economy

China's disappointing Q3 growth unnerves Korea

Exports still strong but complications could arise By Lee Kyung-min The impact of China's disappointing growth in the July-September period should be monitored closely by Korea, a trade-reliant economy which sends over a quarter of its exports to the world's second-largest economy, market watchers said Tuesday. China accounts for 26.1 percent of Korea's exports, a figure much higher than Korea's second-largest trading partner, the U.S., with 15 percent. China's poor industrial output figures are feared to plunge further due to power shortages and plant operation shutdowns brought on by coal shortages, coupled with environmental curbs on heavily polluting steel and aluminum plants. Yet its exports and consumption remain strong, insulating Korea from an immediate adverse impact to a considerable degree. Experts say Korea's exports ― a key growth driver of the economy ― remain relatively unaffected, as indicated by updates in high-frequency datasets. Korea's GDP by extension is not likely to suffer an immediate dent, they say, but complications could arise at any moment, leading to a sh

Oct 19, 2021By Lee Kyung-min

China's disappointing Q3 growth unnerves Korea

Economy

Korea faces possible 3 percent inflation

Deputy Prime Minister and Finance Minister Hong Nam-ki. Korea Times fileBy Lee Kyung-min Korea is expected to register inflation of over 3 percent this year, driven by soaring raw material prices compounded further by hesitancy among oil producers.This bodes ill for the country's policymakers who have long maintained that the annual inflation will be kept below the Bank of Korea's target of 2 percent, weakened mostly by the once-assuring claims that the one-off, supply-side complications would have limited impact in the long term.The figure touching 3 percent, which will be for the first time in a decade since February 2012, is almost certain, since rising commodity and oil prices will translate into higher utility bills.Further advancing this view are slow yet clear signs of recovery in consumption amid a growing number of economies preparing to “Live with COVID-19," fuel for even sharper, demand-driven inflation. The 3 percent inflation is highly possible, as implied by an assessment made by a finance ministry official on economic development for October.“The possibilit

Oct 19, 2021By Lee Kyung-min

Korea faces possible 3 percent inflation

Economy

Korea falls far behind in decarbonization: climate advocacy

Activists from the Seoul-based climate advocacy Solutions for Our Climate hold a protest decrying Korea's coal-heavy energy policies near where the 2018 United Nations Climate Change Conference was held in Katowice, Poland, Dec. 13, 2018. Korea Times file By Lee Kyung-min Korea's overall climate action remains highly insufficient, as indicated by its heavy reliance on fossil fuels for energy generation, government financing for coal projects and a shortfall in its carbon emissions target, global climate advocacy said Monday. Korea should promptly phase out coal power by 2030, halt construction of new coal plants, streamline operation approval for generators of renewables and improve grid access, according to Climate Transparency, a global partnership of 16 think tanks and non-governmental organizations (NGOs). The entity comprises experts from the majority of G20 member nations with a mission of advocating for stronger climate action by the G20 countries.Climate Tr

Oct 18, 2021By Lee Kyung-min

Korea falls far behind in decarbonization: climate advocacy

Korea to raise goal of cutting emissions to 40% by 2030

Lee Kyung-min

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Contribution What ails Korea's housing market?

Kakao Pay IPO clouded by overhang, overvaluation issues

Reporter's Notebook Korea asked to speed up discussion on bitcoin ETF launch

IMM PE primes pump for Able C&C deal

Influencers, platform operators under audit for tax evasion

Tailim Paper IPO draws controversy

Contribution Climate Response Fund's effectiveness will be determined by 'how well it is spent'

China's disappointing Q3 growth unnerves Korea

Korea faces possible 3 percent inflation

Korea falls far behind in decarbonization: climate advocacy

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