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Lee Kyung-min

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Economy

High-leverage brokerages to suffer under stricter ELS market rules

People whose investment was lost demand dismissal of CEOs of banks that sold them high-risk derivative financial product in front of the Financial Supervisory Service, Jan. 16. Korea Times file By Lee Kyung-minHigh-leverage brokerages that relied on sales of high-risk derivatives much greater than their capital for profit will experience a considerable drop in income, following a stricter rule on the scandal-ridden financial products such as equity-linked securities (ELS), derivative-lined securities (DLS), exchange-traded notes (ETN).Most affected are Korea Investment and Securities, KB Securities, Samsung Securities, NH Investment and Securities and Shinyoung Securities whose leverage ratios measured by asset total divided by firm capital stand at a range of between 834 percent and 884 percent. The government recommends that the figure be lower than 1,300 percent.The concern follows a slew of revisions made by the Financial Services Commission (FSC), announced Thu

Jul 31, 2020By Lee Kyung-min
High-leverage brokerages to suffer under stricter ELS market rules
Economy

Is Korean economy bottoming out?

Statistics Korea official Ahn Hyung-joon speaks during a briefing at the Sejong Government Complex, Friday. YonhapBy Lee Kyung-min The nation's industrial output jumped 4.2 percent in June on the back of strong production, consumption and investment all snapping out of a months-long downtrend brought on by the COVID-19 pandemic, data showed Friday.The substantial month-on-month increase provides rationale for some optimism that Asia's fourth-largest, export-reliant economy could bottom out sooner than expected, helped by a gradual recovery in exports following a slow yet clear resumption of economic activities in Korea's trading partner countries.Experts say too rosy an optimism will backfire, stressing the need to stay prepared at all times against uncertainties from rapid changes and deterioration of global financial conditions.Data from Statistics Korea showed Korea's overall industrial production rose 4.2 percent in June from a month earlier. Notably, retail sales and facility investments reported monthly additions of 2.4 percent 5.4 percent, respectively. The industrial output,

Jul 31, 2020By Lee Kyung-min
Is Korean economy bottoming out?
  • Sign of foreigners' return to KOSPI?
Economy

Chaebol to own corporate venture capital

First Vice Minister of Economy and Finance Kim Yong-beom, right, speaks during a briefing at the Seoul Government Complex in Gwanghwamun, Seoul, Thursday. YonhapFunction limited to investment, not lending biz By Lee Kyung-minThe government said Thursday it will allow non-financial holding firms to own corporate venture capital (CVC) firms in which they have no controlling interest, in a move to foster much-flagging private investment amid the economic crisis brought on by the COVID-19 pandemic. This could happen as early as within the year, upon passage of a related law under which a financial investment subsidiary can be owned entirely by a cash-abundant conglomerate.The new regulation will be limited to investment and strictly prohibits expanding into lending among other financial service businesses. This is to help redirect low borrowing cost-oriented liquidity overflow to investment, a much-needed economic activity that could induce growth and higher productivity in the long term. As a measure against the “uncontrollable” growth of large non-financial holding firms, a

Jul 30, 2020By Lee Kyung-min
Chaebol to own corporate venture capital
Economy

Reporter's notebook A letter to busy FSC head: Trust is earned, not demanded.

Financial Services Commission (FSC) Chairman Eun Sung-soo / Korea Times fileFSC head stymied by own lapse in judgment over glorification of fraud-ridden lender By Lee Kyung-min Financial Services Commission (FSC) Chairman Eun Sung-soo is busy.At the moment, the issue that most occupies the mind of the head of the top financial authority seems to be creating a deliberative body comprised of the country's five financial groups to better reflect the opinion of traditional market players increasingly unnerved by their new, strong, technology-backed competitors. At the top of the agenda outlined jointly by the FSC and the groups are ways to ensure fair competition between “the establishment” and latecomers, to limit financial systemic risks brought on by what the groups consider disruptive forces.Also mentioned was “consumer protection,” a policy goal most often cited yet rarely achieved.Funny how the issue that goes to the heart of the commission's reason for existence somehow always finds a way to conveniently elude him, especially when he needs to take responsi

Jul 29, 2020By Lee Kyung-min
[Reporter's notebook] A letter to busy FSC head: Trust is earned, not demanded.
Economy

All eyes on W80bln Bithumb tax dispute

By Lee Kyung-minMarket participants and industry watchers are paying attention to whether the Tax Tribunal will find for Bithumb in a suit it filed to nullify 80.3 billion won ($67.1 million) what it called a groundless tax imposed by the National Tax Service (NTS).This has heightened interest following the government's recently announced plan to impose a capital gains tax on profits made by foreign nationals from cryptocurrency transactions, set to take effect in October 2021.The Ministry of Economy and Finance said July 22 that gains made by non-residents and foreigners after Oct. 1, 2021, will be subject to a tax rate of either up to 20 percent of the difference between the sell price and purchase price or a 10 percent transfer price. Either amount ― whichever is lower ― must be paid on the 10th of every month for gains withdrawn from the account in the form of cash or cryptocurrency.The capital gains will be subject to a withholding tax to be collected from the payer of the gains, notably crypto business operators including exchanges. Exemptions will be granted to those elig

Jul 28, 2020By Lee Kyung-min
All eyes on W80bln Bithumb tax dispute
Economy

China ETFs report high returns on recovering equity market

gettyimagesbankBy Lee Kyung-minExchange-traded funds (ETFs) designed to track the performance of the Chinese equity market have reported solid gains over the past month on the back of strong signs of recovery in the world's second-largest economy, data showed Monday. According to financial service data provider FN Guide, gains made via ETFs invested in China's stock market averaged 13.37 percent as of July 24, far outperforming their peers in not only emerging economies but also advanced ones.The month-on-month gain of investments in the equity market in Brazil, one of the top-performing stock markets, was 10.26 percent. The figure for India was 7.41 percent.Advanced economies saw much lower results. The figure was 5.14 percent for the market in North America, whereas the European regions reported 4.08 percent. Japan reported a 0.67 loss in the same period.The top-performing fund was TIGER China CSI 300 from Mirae Asset Global Investment with a gain of 29.81 percent. Other similar funds from the firm logged gains of between 19.48 percent 29.64 percent. Many of their funds were set up

Jul 27, 2020By Lee Kyung-min
China ETFs report high returns on recovering equity market
Economy

Delinquency rate rises among people in their 20s

gettyimagesbankBy Lee Kyung-min The number of customers aged between 20 and 29 failing to pay off credit loans soared in June, fueling concerns that unemployed young people with low credit and little collateral to offer will emerge as the highest-risk borrowers amid the virus-triggered economic crisis.More people in desperate need of cash are opting for high-rate credit loans over collateral-backed low-rate loans, an indication of overall waning financial conditions.Data from the Korea Credit Bureau analyzed by the Narasallim Institute, a private research organization, showed the amount overdue among borrowers in their 20s stood at 104,000 won ($87) in June, up 0.75 percent from a month earlier. The increase is notable given all other age groups saw the amount decrease from the month before.Of more concern is the amount taken out by 20-somethings soared to 6.71 million won in June, reporting a 2.7 percent month-on-month jump, a figure far higher compared to 0.5 percent taken out by all other age groups in the same period.Loans sought by the 20-somethings have been on a steep rise sin

Jul 27, 2020By Lee Kyung-min
Delinquency rate rises among people in their 20s
Economy

Korea's tax on real estate trading highest among OECD

A woman looks at a list of offerings of rent and sales of apartments put up on the entrance of a real estate agent's office in Seoul. Korea Times fileBy Lee Kyung-minThe tax on real estate transactions compared to the country's GDP was the highest for Koreans in 2018, strengthening calls for revisions to the government's botched real estate policies over the past few years to lower the tax to encourage multiple home owners to sell their properties.Data submitted by the National Assembly Budget Office (NABO) to Rep. Jeong Jeong-soon of the ruling Democratic Party of Korea, showed Koreans paid an aggregate 27.4 trillion won ($22.7 billion) in taxes on property transaction in 2018, accounting for 1.5 percent of the country's nominal GDP. This is the highest among OECD member countries, followed by Australia (1.3 percent), Belgium and Italy (1.1 percent). The figure was 0.4 percent for Germany, 0.3 percent for Japan and 0.1 percent for the U.S. The OECD average was 0.4 percent.The tax paid by Koreans for owning real estate was 15.6 trillion won in 2018, or 0.9 percent of GDP, this time m

Jul 26, 2020By Lee Kyung-min
Korea's tax on real estate trading highest among OECD
Economy

Kim elected to fight against COVID-19

Kim Yoon-sikBy Lee Kyung-min National Credit Union Federation of Korea (NACUFOK) Chairman Kim Yoon-sik has been elected a member of a special committee under World Council of Credit Unions (WOCCU) set up to fight against COVID-19, the organization said Thursday.Kim, the President of the Association of Asian Confederation of Credit Unions (ACCU), will help some 60 member countries of the global body set up and execute strategies to tackle the global pandemic alongside WOCCU President and CEO Brian Branch.“I will outline a well-coordinated plan to help other countries navigate the unprecedented difficulty brought on by the pandemic. I will help them with providing personal protective equipment among other medical emergency supplies,” he said.This comes about a year after he clinched a second term as the WOCCU director in July 2019, adding to his proven track record of leadership in the global organization. He was the first Asian to have had the two-year term extended.Kim has since repeatedly reaffirmed his commitment to the agency mandate of helping all people have access t

Jul 23, 2020By Lee Kyung-min
Kim elected to fight against COVID-19
Economy

South Korea to levy capital gains tax on stocks from 2023

Deputy Prime Minister and Finance Minister Hong Nam-ki, right, speaks during a briefing at Sejong Government Complex, Tuesday. Courtesy of Ministry of Economy and FinanceForeigners face 20% tax on gains from cryptocurrency transactions By Lee Kyung-minThe government said Wednesday that it will impose capital gains tax on wealthy stock investors starting 2023 as planned, with the minimum deductible amount raised to over double the initial figure, in a much-rushed move to contain fierce backlash from many retail investors. Gains from transactions of listed shares will face a 20-percent tax on anything earned over 50 million won ($41,800), a figure revised from the previously set 20 million won announced June 25. The rate will be 25 percent if profits from stocks are over 300 million won. The eased rule announced by the Ministry of Economy and Finance is part of a tax code revision for 2020, a comprehensive measure designed to help the country better overcome the virus-induced economic crisis and bolster equitable and just taxation. Around 67.6 billion won in net tax revenue increase i

Jul 22, 2020By Lee Kyung-min
South Korea to levy capital gains tax on stocks from 2023
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