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Lee Kyung-min

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Economy

Financial Supervisory Service recommends revision of Krafton IPO price

PlayerUnknown's Battlegrounds' logoBy Lee Kyung-min Market participants are paying keen attention as to whether Krafton, the local developer of the popular game “PlayerUnknown's Battlegrounds,” will lower its corporate valuation for its initial public offering (IPO), following the recommendation by the Financial Supervisory Service (FSS) to revise the firm's securities report to list on KOSPI.The financial authority did not mention valuation as a cause for rejecting the report, according to the institutional investors that sought an explanation for the unexpected turn of events.Yet, the firm long criticized for its overvalued IPO price is likely to lower its valuation, given the precedent set by SD Biosensor. SD Biosensor is a Suwon-based in-vitro diagnostics firm, which postponed its pre-IPO bidding by about a month after lowering its corporate valuation by over 2 trillion won ($1.7 billion), due to the FSS's revision recommendation.No additional hurdles are expected for the diagnostics firm. Its pre-IPO bidding for institutional investors is scheduled for July 5 to 6.Kr

Jul 1, 2021By Lee Kyung-min
Financial Supervisory Service recommends revision of Krafton IPO price
Economy

Finance minister warns of 'excessive leverage'

Deputy Prime Minister and Finance Minister Hong Nam-ki, second from right, speaks at a meeting at the Seoul Government Complex, Wednesday. YonhapBy Lee Kyung-minSharp rises in housing prices despite an overall decline in household incomes and excessive debt are two major downside risks to home values, creating a major downside risk to housing prices in the future, the country's top policymaker said Wednesday.The comments came in response to the continued “panic-driven” demand for leveraged investments in the real estate market, where most “cheap loans” have ended up amid a record-low central bank rate put in place to weather the pandemic-induced economic crisis.“Although the recent housing market instability is in part explained by a supply and demand factor, the volume of occupancy remains average and demand continues for apartments in redevelopment zones in Seoul including southern areas. Prices will also drop sharply in the second half of the year,” Deputy Prime Minister and Finance Minister Hong Nam-ki said at a meeting of economy-related minis

Jun 30, 2021By Lee Kyung-min
Finance minister warns of 'excessive leverage'
Economy

Kakao Bank, Kakao Pay accelerate IPO schedules

KakaoBank CEO Yun Ho-youngBy Lee Kyung-min Kakao Bank and Kakao Pay, two financial services affiliates of Kakao Corp., are speeding up the timelines of their initial public offerings (IPO). Kakao owns 31.6 percent of Kakao Bank and 55 percent of Kakao Pay.Kakao Bank will be listed on the Korea Exchange (KRX) on Aug. 8 with its initial subscription price likely to range between 33,000 won ($29.2) and 39,000 won.Kakao Pay plans to apply for a brokerage license with the Financial Supervisory Service (FSS) this week, following the passage of its request to the KRX for preliminary approval, Monday.The number of the internet-only bank's stocks available for public subscription will be 65.45 million, accounting for 13.78 percent of total outstanding shares. Between 2.1 trillion won and 2.5 trillion won will be drawn from retail investors.Part of the investment will be used to increase its available capital reserve, which is a prerequisite in offering loans to medium- and low-credit borrowers.  About 350 billion won will be invested to hire skilled professionals, come up with new p

Jun 29, 2021By Lee Kyung-min
Kakao Bank, Kakao Pay accelerate IPO schedules
Economy

Korea to launch climate fund, tackle population crisis

President Moon Jae-in is accompanied by Hong Nam-ki, left, deputy prime minister and minister of economy and finance, before presiding over an expanded meeting of economy-related ministers at Cheong Wa Dae, Monday. Korea Times photo by Wang Tae-seokGovernment to push for structural economic reform in 2nd halfBy Lee Kyung-min The government said Monday that it will beef up efforts to accelerate structural reform in the second half of the year to achieve a solid economic recovery, better prepare for a post-pandemic world and ensure the country's transformation into an advanced economy. The administration plans to set up the necessary infrastructure and incentive systems to foster a private sector-led ecosystem that promotes environmental, social and corporate governance (ESG) values.It also plans to launch a climate fund next year to help the country meet its goal of net-zero carbon emissions by 2050 and become a low-carbon economy.Infrastructure will be set up to reduce the nation's dependence on coal-fired energy production, and financial support will be offered for firms and human r

Jun 28, 2021By Lee Kyung-min
Korea to launch climate fund, tackle population crisis
Economy

Benefits from toughened loan regulations limited for insurers

ATMs operated by commercial banks / Korea Times fileBy Lee Kyung-min Insurers are not likely to see a major benefit from a tightened lending rule defined by the implementation of the debt-service ratio (DSR), since they offer higher borrowing rates than commercial lenders.The new rule, set to take effect Thursday, stipulates a 60 percent cap on the DSR for insurers that have long been known to charge higher rates for low-credit borrowers, whereas the cap is 40 percent for commercial lenders that have a customer base with higher credit and stronger ability to pay back. This new rule came despite expectations that the difference of 20 percentage points in the amount borrowable would result in a “ballooning effect,” as characterized by people being pushed to choose insurers after having the total amount of loans reduced due to the 40 percent cap.Yet it remains unknown whether insurers will see a greater-than-expected interest income, as the possibility remains for young people ― with relatively low credit and limited collaterals to put up ― to seek loans due to a persis

Jun 27, 2021By Lee Kyung-min
Benefits from toughened loan regulations limited for insurers
Economy

Bank of Korea chief signals rate hike within this year

Bank of Korea (BOK) Governor Lee Ju-yeol speaks during a press briefing at the bank's headquarters in Seoul, Thursday. YonhapGovernor Lee expects mid-term inflation woes to deepen By Lee Kyung-min Bank of Korea Governor Lee Ju-yeol said Thursday that the central bank will carry out its first post-pandemic rate hike within this year in a preemptive move to reduce a financial imbalance and keep inflationary pressure under control. “It is necessary to normalize monetary policy in an orderly manner some time not too late this year,” Lee said during a press briefing at the BOK headquarters in Seoul.This is a clearer and stronger signal compared to his previous stance that the pandemic-induced emergency expansionary monetary policy would need an “orderly, gradual drawdown,” with the pace of the policy adjustment to be determined by the degree of economic recovery from the COVID-19 pandemic.Also strengthening the case for the earlier-than-expected rate hike are mid-term inflation woes, as illustrated by a steeper rise in the prices of goods and services that tend not

Jun 24, 2021By Lee Kyung-min
Bank of Korea chief signals rate hike within this year
Economy

New real estate taxation policy faces strong backlash

Apartment complexes in Seoul. Korea Times file'Ruling party idea unconstitutional, lacks predictability' By Lee Kyung-min Criticism is mounting over the ruling party's plan to limit the targets of the comprehensive real estate tax to the top 2 percent of owners of one home, in what market watchers call a politically motivated move ahead of the presidential election next year.The much-rushed, “unheard of and unconstitutional” idea is not only confusing homeowners who are not able to predict whether they will have to pay the hefty tax or not, but is also in danger of squandering administrative resources needed to determine the scope of the tax base set by assessing the value of homes every year.Key specifics of the revision including officially appraising the value of homes are left to be finalized by government ministries-revised ordinances, bypassing the National Assembly.This, some experts say, is unconstitutional since a relevant clause under the Constitution stipulates that the tax rate and the list of taxable income and assets must be set by the legislature.The minimu

Jun 24, 2021By Lee Kyung-min
New real estate taxation policy faces strong backlash
Economy

Shinhan Bank to shutter 40 branches this year

Shinhan Bank CEO Jin Ok-dong By Lee Kyung-minShinhan Bank plans to close down at least 40 offline branches in the second half of this year, due to high operating costs and plummeting interest income amid ultra-low lending rates, local banking sources said, Wednesday.The bank has already closed six branches so far this year, meaning the number of branches to be shut down could reach close to 50 by the end of the year. This means Shinhan will no longer be singled out as falling behind compared to other banks in the digitization drive spearheaded by the financial industry.It costs Shinhan Bank up to 1.7 billion won ($1.4 million) a year to keep one branch open in a commercial area of downtown Seoul.“It is difficult to find a reason to operate costly branches, since key services are available online. We will continue to maintain stellar customer services,” a Shinhan official said.Shinhan Bank closed down 21 branches nationwide last year, while rival KB Kookmin Bank shut down 64 over the same period. Hana Bank and Woori Bank closed down 74 and 58 branches, respectively. T

Jun 23, 2021By Lee Kyung-min
Shinhan Bank to shutter 40 branches this year
Economy

Successful Toss Bank listing on track

Toss founder and CEO Lee Seung-gunBy Lee Kyung-minToss Bank, the mobile financial platform operated by Viva Republica, is expected to gain momentum by bringing on more attractive, large investors. Viva Republica has recently drawn 460 billion won ($404 million) in investments, with its corporate value soaring to 8.2 trillion won from 1.2 trillion won in 2018.The investment will help the internet-only bank set to launch in September increase its capital. The capital increase will be a vital step for Toss towards operating a lending business that requires a loan-screening system, backed by a substantial amount of financial reserves.Also moving forward is the prospect of the internet-only bank's initial public offering (IPO) as early as 2023, preceded by a hefty capital increase in the first half of next year.Part of the 460 billion won in investments will go to the internet-only bank and Toss Securities. The securities subsidiary was launched in March and has accumulated 3.5 million accounts since emerging as a leader in mobile trading systems (MTS).Toss Bank's total capital stands at

Jun 23, 2021By Lee Kyung-min
Successful Toss Bank listing on track
Economy

Inflation fears weighing on Korean economy

Producer price growth hits 10-year high By Lee Kyung-min The specter of inflation is looming larger and larger, with the nation's producer price growth hitting the highest level in nearly 10 years amid soaring raw materials and oil prices fueled by a rebound in international trade.Given the fact that producer price increases are reflected in consumer prices with a time lag of a few months, inflation woes will further deepen in the coming months pressuring the Bank of Korea to raise its key interest rate earlier than expected. Consumer prices have already exceeded the central bank's inflation target of 2 percent for the two straight months. Data from the central bank released Tuesday showed that producer prices reported a 0.4 percent month-on-month increase in May, led by a price jump for industrial goods, due to higher oil and raw material prices. It was the seventh consecutive month of increases.On a year-on-year basis, the prices surged 6.4 percent, the highest since the 6.9 percent rise in August 2011.Prices of goods with imported products factored in also rose 0.5 percent from a

Jun 22, 2021By Lee Kyung-min
Inflation fears weighing on Korean economy
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