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  • Economy

    Seoul stocks, won hammered by massive foreign selling

    Seoul stocks plunged Friday as a prolonged foreign sell-off collided with a sharp downturn in global semiconductor shares, sending the benchmark KOSPI down more than 5 percent to below the 8,200 level. The sustained foreign investor exodus also continued to weigh on the Korean won. In Seoul’s onshore foreign exchange market, the won closed at 1,539.1 per dollar, down 9.4 won from the previous session. During intraday trading, it briefly approached the 1,550 level, its weakest since March 2009, during the global financial crisis. The won has now traded above the 1,500 per dollar threshold for 14 consecutive sessions. KOSPI opened at 8,323.20, down 3.66 percent from the previous session, according to the Korea Exchange. Heavy selling pressure persisted throughout the day, prompting the year’s 10th sidecar shortly after the opening bell — a market safeguard that temporarily suspends program trading during periods of extreme volatility. The index ultimately closed at 8,160.59, down 5.54 percent. Foreign and institutional investors drove the decline, selling a net 3.52 trillion won and

    2 MIN READBy Park Han-sol
    Seoul stocks, won hammered by massive foreign selling
  • Economy

    Korea diversifying LNG imports to ease Middle East dependence: KOGAS chief

    1 MIN READBy Yonhap
    Korea diversifying LNG imports to ease Middle East dependence: KOGAS chief
  • Economy

    Korea's currency tumbles to 17-year low on foreign stock selloff

    1 MIN READBy Yonhap
    Korea's currency tumbles to 17-year low on foreign stock selloff
  • Economy

    Gov't vows to lower barriers for foreign investors with 24-hour FX market

    1 MIN READBy Yonhap
    Gov't vows to lower barriers for foreign investors with 24-hour FX market
  • Economy

    KRX issues sell-side sidecar for KOSPI on sharp fall

    1 MIN READBy Yonhap
    KRX issues sell-side sidecar for KOSPI on sharp fall
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CEO & Publisher: Oh Young-jinDigital News Email: webmaster@koreatimes.co.krTel: 02-724-2114Online newspaper registration No: 서울,아52844Date of registration: 2020.02.05Masthead: The Korea TimesCopyright © koreatimes.co.kr. All rights reserved.

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Economy

'Zombie companies' rise amid negative investor sentiment, high interest

By Yi Whan-wooThe number of “zombie companies” in Korea, which refer to firms that are unable to cover even interest payments on loans for three consecutive years, more than tripled over 10 years, according to data released Monday.In its latest report, KDB Future Strategy Research Institute, a think tank of Korea Development Bank (KDB), said that their numbers surged to 4,478 in 2021 from 1,353 in 2011.During the citied period, more small and medium-sized enterprises (SMEs) failed to make sufficient profits to cover the interest on their debts.They accounted for 90.5 percent of the total in 2011 and 95.8 percent in 2021, whereas conglomerates accounted for 9.5 percent in 2011 and 4.2 percent in 2021.By sector, 1,294 of the 4,478 companies were in manufacturing. Another 1,182 were in real estate while another 367 were in wholesale and retail businesses.The think tank attributed the rise in the number of zombie companies to negative investor sentiment that makes it difficult for businesses in general to raise capital by issuing corporate bonds.Accordingly, more companies ar

Aug 22, 2022By Yi Whan-woo
'Zombie companies' rise amid negative investor sentiment, high interest
Economy

Won sinks to 1,330 level per dollar for 1st time in over 13 years

This photo, taken Aug. 22, depicts currency movements on a monitor at a Hana Bank dealing room in Seoul. YonhapThe South Korean currency on Monday fell to the 1,330 won level against the U.S. dollar for the first time in more than 13 years amid prospects that the Federal Reserve will maintain its aggressive rate hike policy.The Korean currency was trading at 1,337 won against the dollar as of 10:11 a.m., down 11.1 won from the previous session. The won hit as low as 1,338.50 won per dollar after the market opened.It marked the first time that the won has slid to the 1,330 level against the greenback since April 29, 2009.The won's weakness came as the minutes of the Fed's July policy meeting released last week showed the U.S. central bank is likely to continue its aggressive monetary tightening to put a lid on inflation.Since the local currency fell to the 1,300 level for the first time in nearly 13 years on June 23, the won's weakness has been accelerated as the Fed's policy stance boosted demand for the greenback. The won has declined more than 11 percent against the dollar so far t

Aug 22, 2022
Won sinks to 1,330 level per dollar for 1st time in over 13 years
Economy

Korea aims to sharply lower fiscal deficit for next year

Korea Won money pack 3d illustration. GettyimagesbankKorea is mapping out next year's national budget in a way that would lower the fiscal deficit to 3 percent of its gross domestic product (GDP) or less for the first time in four years, sources said Monday.The move is aimed at improving fiscal soundness that has been compromised by years of expansionary fiscal spending under the preceding liberal government as the Yoon Suk-yeol government plans to implement a belt-tightening fiscal policy.If the details are finalized as planned, the fiscal deficit-to-GDP ratio would drop below 3 percent for the first time since 2019, when the corresponding ratio reached 1.9 percent based on the national budget plan.The country's deficit-to-GDP ratio is expected to reach 5.1 percent this year.In the first half, the country logged a fiscal deficit of 101.9 trillion won, larger than a shortfall of 79.7 trillion won a year earlier.The finance ministry is also working on a stricter fiscal rule in an effort to enhance the health of public finances.Under the proposal, if the debt-to-GDP ratio at any point

Aug 22, 2022
Korea aims to sharply lower fiscal deficit for next year
Economy

Exports up 3.9% during first 20 days of Aug.; trade deficit widens

This file photo taken, July 1, shows stacks of containers at a port in Korea's southeastern city of Busan. NewsisKorea's exports rose 3.9 percent on-year in the first 20 days of August on robust demand for petroleum products and autos, but the country saw its trade deficit widen on soaring fuel costs, data showed Monday.The country's outbound shipments stood at $33.4 billion in the Aug. 1-20 period, compared with $32.2 billion a year earlier, according to the data from the Korea Customs Service.Imports jumped 22.1 percent on-year to $43.6 billion during the cited period, resulting in a trade deficit of $10.2 billion. The trade deficit was larger than a shortfall of $3.6 billion the previous year.If the current trend continues, South Korea is expected to post a trade deficit for the fifth straight month in August due to high energy costs.Exports, which account for half of the economy, rose 9.4 percent on-year in July, marking the 21st consecutive month of growth. But the country suffered a trade deficit for the fourth straight month as high oil and commodity prices pushed up import bi

Aug 22, 2022
Exports up 3.9% during first 20 days of Aug.; trade deficit widens
Economy

Banks start notifying customers of loan-to-deposit ratios

Financial Supervisory Service Governor Lee Bok-hyun speaks during a meeting with leaders of major commercial banks here in Seoul, June 20. YonhapBy Lee Min-hyungBanks will begin notifying customers of their loan-to-deposit interest rate gap from Monday, making it easier for borrowers to search commercial lenders offering better interest conditions.Customers can visit the website of the Korea Federation of Banks to compare the ratio from each lender.This follows President Yoon Suk-yeol's campaign pledge to protect the right of bank customers and boost competition among financial institutions here amid steep rate hikes.Starting from August 2021, the Bank of Korea (BOK) has increased the benchmark rate to 2.25 percent after cutting it to 0.5 percent amid then-escalating fears of the COVID-19 pandemic.Yoon pledged to stop banks and financial institutions from reaping any undue interest margin by taking advantage of global monetary tightening.Notifications will be made on a monthly basis and it is widely expected that political pressure will push more banks to increase interest rates on t

Aug 21, 2022By Lee Min-hyung
Banks start notifying customers of loan-to-deposit ratios
Economy

Korea urged to fix trade deficit with China through diversification, tech competitiveness

Containers are being unloaded at Busan Port on July 1. Yonhap By Kim Bo-eunCalls are growing for Korea to diversify its trade with countries other than China, after Korea recorded three consecutive months of trade deficits with the world's No. 2 economy.Imports from China have continued to grow, but exports to the mainland have slowed significantly, resulting in a trade deficit for Korea, for the months of May through July. It is the first time Korea recorded a trade deficit for three straight months since the establishment of diplomatic relations with China in 1992. Korea's trade deficit came to $1.1 billion in May, $1.2 billion in June and $600 million in July, according to data from the Korea International Trade Association (KITA).The trade surplus of display panels, petroleum products, cosmetics and chip manufacturing equipment ― major export items to China ― shrank by more than $500 million in the first half of this year.This decrease was partly due to COVID-19

Aug 19, 2022By Kim Bo-eun
Korea urged to fix trade deficit with China through diversification, tech competitiveness
Economy

'Korean won may dip to 1,350 level over Fed's hawkish rate hikes'

By Yi Whan-wooThe Korean currency may weaken to as low as 1,350 won against the U.S dollar in the most extreme case, analysts said Friday, after the U.S. Federal Reserve stated it is committed to more hawkish interest rate hikes to tame inflation. The Korean won opened at 1,326 per dollar on Friday, falling by 4.5 won from Thursday's close when it breached the 1,320 level again for the first time in a month.It sank to 1,326.9 per dollar during intraday trading, marking the lowest level in more than 13 years, before closing at 1,325.9.The won mainly hovered between 1,300 and mid-1,310 levels for the past two months, after it dipped below 1,300 for the first time in nearly 13 years on June 23 due to increased external economic risks.The volatility in the won-dollar exchange rate, Friday, came after the Fed's minutes of its latest rate-setting meeting in July were released.Back then, it carried out a giant step ― a rare 75 basis point increase in policy rate ― for the second consecutive month to control inflation.The minutes then showed the U.S. central bank officials saw “little

Aug 19, 2022By Yi Whan-woo
'Korean won may dip to 1,350 level over Fed's hawkish rate hikes'
Economy

Regulator to announce investor protection measures from biz takeovers in Q4

Getty Images BankSouth Korea's financial regulator said Friday it will announce a set of measures to protect retail investors from the process of business takeovers in the fourth quarter of this year."We are reviewing detailed measures by gathering opinions from private-sector experts through meetings," the Financial Services Commission (FSC) said in a press release."After holding discussions with experts, we plan to announce measures to protect ordinary investors in the middle of the fourth quarter," it added.The FSC said it has commissioned a research report on how to beef up investor protection in case of managerial changes.The financial regulator clarified the timetable after an earlier media report said the Yoon Suk-yeol government has put on the back burner its promised push to strengthen the protection of retail investors from mergers and acquisitions (M&As) between listed firms and other types of business consolidation.Measures that reportedly have been under consideration include improving rules on providing investors with the right to ask for the purchase of their stock

Aug 19, 2022
Regulator to announce investor protection measures from biz takeovers in Q4
Economy

How can Korea's taxi shortage be resolved?

A photo showing cabs parked outside a taxi company in Busan / Korea Times fileBy Kim Bo-eunThe shortage of cabs across the country continues to cause inconveniences, and the government and businesses have been struggling to come up with solutions. The dive in the number of operating taxis was driven by the COVID-19 pandemic, which prompted many drivers to leave the taxi-driving business amid a plunge in demand for ride services."Younger drivers flocked to delivery or chauffeur services, as they sought better paying jobs," Lee Hyun-ro, at the Federation of Korean Taxi Workers' Unions, said.Data from the National Joint Conference of Taxi Associations shows there were a total of 230,598 taxis registered nationwide as of June, which is down 6 percent from the number that were registered in January 2019 prior to the start of the pandemic.It was mostly drivers affiliated with taxi companies who left their jobs, compared to drivers operating with their own business licenses, the majority of which continued working. The number of drivers affiliated with taxi companies stood at 74,571 as of J

Aug 19, 2022By Kim Bo-eun
How can Korea's taxi shortage be resolved?
Economy

Korea to preemptively deal with short-term foreign debt, capital flows

,000-won banknotes at Seoul KEB Hana Bank / YonhapKorea said Friday it plans to preemptively tackle a rise in the short-term foreign debt and volatility of cross-border capital flows as heightened external economic uncertainty could pose risks to its external soundness.The government also said the pace of the Korean currency's weakness against the U.S. dollar is not steep, compared with other major currencies such as the yen and the euro."Korea's external soundness remains relatively good even in the midst of heightened global uncertainty. But the global economic slowdown, volatility in energy prices and the Federal Reserve's rate hike drives could also pose risks to the external soundness," the finance ministry said.Concerns about capital flight have increased as the Fed's aggressive rate hikes made U.S. interest rates stand higher than Korea's borrowing costs.Capital outflows are feared to further weaken the Korean currency against the dollar, putting upward pressure on inflation. The won has slid around 10 percent per dollar so far this year.To preemptively tackle risks, the gover

Aug 19, 2022
Korea to preemptively deal with short-term foreign debt, capital flows
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