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Economy

Korean financial firms pressed to change Myanmar business strategies

By Lee Min-hyungKorea's financial firms are being pressed to scale down their businesses in Myanmar amid escalating uncertainties following a military coup.Myanmar's military staged a coup in early February. The political uncertainty there is showing little sign of abating amid a deepening conflict between the military and thousands of protesters there, raising the likelihood that the instability will last for a longer period of time.This has sparked worries that a number of Korean financial firms would suffer financially and may end up scaling down their business operations there.Several Korean banks, insurers and card firms are operating in the Southeast Asian country, with some opening their branches in January of this year. As most of them cannot engage in normal business activities for now, concerns are growing that they will have to downsize their operations or possibly pull out their staff.Korean bank officials said they are stepping up monitoring of their branch offices in Myanmar in real time due to increasing uncertainties.“KB Kookmin Bank has established a hotline be

Mar 28, 2021By Lee Min-hyung
Korean financial firms pressed to change Myanmar business strategies
Economy

Why are SPACs unpopular in Korea?

Gettyimagesbank Regulatory changes needed to spur growth of SPACs in Korea By Anna J. ParkSpecial-purpose acquisition companies (SPACs) are enjoying a heyday through initial public offerings (IPOs), particularly in the U.S. stock markets. SPACs are paper companies solely incorporated to raise capital through initial public offerings to acquire another existing company. SPACs in the U.S. have raised about $87.9 billion so far this year, already exceeding last year's total of $83.4 billion. Despite their growing popularity in the U.S., SPACs are not as favored among investors in Korea. One of the reasons behind this is the trauma the Korean market holds. The country's very first SPAC failed and ended up getting liquidated. Back in 2010, the “Green Korea” SPAC by Daewoo Securities ― now Mirae Asset Daewoo ― raised 100 billion won ($90 million), but ended up getting liquidated after three years following failed attempts to acquire promising companies.Since the failure o

Mar 26, 2021By Anna J. Park
Why are SPACs unpopular in Korea?
Economy

IMF sharply raises 2021 growth outlook for Korea to 3.6%

In this file photo taken on April 15, 2020, a sign is seen outside the headquarters of the International Monetary Fund in Washington, DC. AFPThe International Monetary Fund (IMF) on Friday sharply raised its growth outlook for South Korea this year, citing robust exports and the country's fiscal policy support amid the pandemic.The IMF forecast the South Korean economy to grow 3.6 percent this year, up from its estimate in January of 3.1 percent.The upward revision came as the IMF issued a report on the outcome of its annual consultation with South Korea held in January.The IMF said Asia's fourth-largest economy is expected to recover this year, "supported by a gradual normalization of COVID-related factors and stronger external demand." It also took into account the anticipated impact of the latest 15 trillion-won (US$13 billion) extra budget.The IMF's projection is well above the growth estimates made by the Organization for Economic Cooperation and Development (OECD) and the Bank of Korea (BOK).The OECD expected Asia's fourth-largest economy to expand 3.3 percent this year, and th

Mar 26, 2021
IMF sharply raises 2021 growth outlook for Korea to 3.6%
Economy

Bank of Korea warns of household credit risk

Min Jwa-hong, center, director at the Bank of Korea's financial stability department, speaks during a briefing at its headquarters in Seoul, Thursday. Courtesy of Bank of KoreaBy Lee Min-hyungThe Bank of Korea (BOK) warned of a household credit risk amid a sharp increase in their debt levels after the coronavirus outbreak last year, the central bank said Thursday.“We are doubtful whether the actual credit risks of households and companies have been exposed,” Min Jwa-hong, director at the central bank's financial stability department, told reporters during an online briefing. “The risks may have been eclipsed by (pandemic-induced) financial support,” he added.According to BOK data, the nation's household debt reached 1,726.1 trillion won ($1.52 trillion) as of the end of 2020, up 7.9 percent from the previous year.What is particularly worrisome is the rapid growth of the figure. The quarterly growth rate of household debt stood at 4.6 percent as of the first quarter of 2020 from a quarter earlier. The level has since gradually increased to 7.9 percent during th

Mar 25, 2021By Lee Min-hyung
Bank of Korea warns of household credit risk
Economy

Netmarble Neo to go public this year

Netmarble logo By Anna J. ParkNetmarble's subsidiary game company Netmarble Neo, which is preparing for an IPO within this year, sent out requests for proposals (RFP) recently to brokerages firms to select underwriters for the public offering.Netmarble Neo developed Netmarble's hit-game “Lineage 2: Revolution” in 2016, which was its first mobile massively multiplayer online role-playing game (MMORPG), followed by “The King of Fighters Allstar” in 2018. Its new mega game, “Cross Worlds,” is waiting for its first global release, including in Japan and in Taiwan, later this year.Market watchers say the timing of the IPO has been set, as the game company faces the release of “Cross Worlds,” which is expected to come out sometime during the first half of this year.The public offering is in line with Netmarble's previous stance to list its competent subsidiaries that publish popular games. Among various subsidiaries, Netmarble Neo is assessed as being one of the top profit

Mar 24, 2021By Anna J. Park
Netmarble Neo to go public this year
Economy

Bank of Korea chief dismisses inflation concerns

Bank of Korea Governor Lee Ju-yeol responds to questions from lawmakers on the sidelines of his attendance at a session in the National Assembly, Feb. 23. YonhapBy Kim Yoo-chulBank of Korea (BOK) Governor Lee Ju-yeol downplayed concerns over inflation Wednesday, hinting that the central bank will not tighten its monetary policy in the near future.“Inflation levels could possibly build up, but it's less likely to continue to increase down the road. Now is not the right time to respond with monetary policy because of the risk of inflation,” Governor Lee said in comments released Wednesday.The BOK chief, however, remains cautious over a possible hike in consumer prices during the forthcoming process for the normalization of economic activities.“The bank, therefore, would handle the inflation issue by monitoring moves of consumer prices,” according to the BOK head. The remarks are widely seen by many as the bank's reaffirmation to keep its policy accommodative until the country's economy, Asia's fourth-largest, can stage a sustainable recovery from the COVID-19 pa

Mar 24, 2021By Kim Yoo-chul
Bank of Korea chief dismisses inflation concerns
Economy

Pension fund rejects shareholder activism

The National Pension Service (NPS) Investment Management headquarters in Jeonju, North Jeolla Province / Courtesy of NPSAttention now focused on LG, Hankook & CompanyBy Park Jae-hyukInvestors are paying keen attention to the stance of the National Pension Service (NPS) on shareholder activism against LG and Hankook & Company, after the pension fund has shown a tendency to object to most shareholder proposals raised during the proxy season this year.As of Wednesday 3 p.m., the NPS did not disclose its position on LG's planned spin-off of the group's affiliates, which has faced backlash from U.S. hedge fund Whitebox Advisors and global proxy advisers, including Institutional Shareholder Services (ISS) and Glass Lewis. The state pension service also remained silent about shareholder proposals made by Hankook & Company Vice Chairman Cho Hyun-sik, who has been locked in a dispute with his younger brother, CEO Cho Hyun-bum, over control of the nation's leading tire maker.The NPS is the second-largest shareholder of LG's holding company, LG Corp., with a 7.81 percent stake and h

Mar 24, 2021By Park Jae-hyuk
Pension fund rejects shareholder activism
Economy

Overstimulated? Stocks soar 75% in historic 12-month run

The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, March 9, 2020. Reuters-YonhapNEW YORK (AP) -- It was one year ago that the terrifying free fall for the stock market suddenly ended, ushering in one of its greatest runs.On March 23, 2020, the SP 500 fell 2.9%. In all, the index dropped nearly 34% in about a month, wiping out three years' worth of gains for the market.That turned out to be the bottom, even though the coronavirus pandemic worsened in the ensuing months and the economy sank deeper into recession. Massive amounts of support for the economy from the Federal Reserve and Congress limited how far stocks would fall. The market recovered all its losses by August.As time passed, the quick development of coronavirus vaccines helped stocks shoot even higher. So did growing legions of first-time investors, who suddenly had plenty of time to get into the market using free trading apps on their phones.It all led to a 76.1% surge for the SP 500 and a shocking return to record heights. This run looks to be one of the, if

Mar 23, 2021
Overstimulated? Stocks soar 75% in historic 12-month run
Economy

Creditors press SsangYong to cut labor costs to attract capital for revival

SsangYong Motor's plant in Pyeongtaek, Gyeonggi Province, in this file photo taken on Feb. 3. YonhapBy Lee Min-hyungCreditors of SsangYong Motor have stepped up pressure on the cash-strapped automaker to drastically cut labor costs, in a bid to attract investment from new potential investor HAAH Automotive Holdings.SsangYong is seeking to file for a prepackaged bankruptcy, but the plan has hit a snag after the company and the U.S.-based auto retailer failed recently to clinch a contract once again. HAAH was supposed to sign a deal with SsangYong for a capital injection by the end of February, but the plan has been delayed due to the automaker's weakening outlook for revival, amid falling sales.The Korea Development Bank (KDB), the main creditor of SsangYong, has urged the company to show its strong willingness for a revival by taking its cost-cutting measures to a “radical level,” if it hopes to attract capital from the new investor and creditor.As SsangYong is in dire need of capital to realize its plan for a prepackaged bankruptcy, the best-case scenario for the automak

Mar 23, 2021By Lee Min-hyung
Creditors press SsangYong to cut labor costs to attract capital for revival
Economy

NPS expands investment in global PEF

The headquarters of National Pension Service (NPS) located in Jeonju / Courtesy of NPSBy Anna J. ParkThe National Pension Service (NPS), the nation's largest institutional investor with around 835 trillion won ($740 billion), appears to have acquired a stake in a global private equity firm (PEF) for the first time a couple years ago, in an effort to increase the portion of alternative investments in its portfolio.According to the investment banking industry Tuesday, the NPS made a strategic investment into London-based PEF BC Partners sometime in 2019. The investment, however, is not a direct acquisition of the global PEF's stakes. It was rather an indirect and joint stake investment into the U.K. PEF through a Blackstone fund that acquired around 10 percent or 15 percent of BC Partners' stakes with about 500 million euros in the summer of 2019. New York-based Blackstone's Alternative Asset Management division acquired the stake in its London-based private equity rival with the raised capital through the fund to seek joint growth of the buyout industry. Although the specific amount o

Mar 23, 2021By Anna J. Park
NPS expands investment in global PEF
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