[Contribution] Korea -- a role model for emerging economies

During a visit to Seoul this week, I will hold meetings with government officials from South Korea to discuss the important role that Korea has as a shareholder in the European Bank for Reconstruction and Development. I will also meet Korean companies, with a view to stepping up joint investments in the EBRD regions.We already have strong partnerships with the Korean industry and a history of successful investments with some of the countries’ leading corporations such as Samsung, LG and KT.Suma

July 10, 2016

[Herald Interview] China slowdown weighs on Korea

Economic challenges in China such as slow growth, market restructuring and an aging population, are expected to hurt the Korean economy in the mid to short term, according to Brian Jackson, a senior economist at IHS, a global business analytics provider. “China’s slowing growth by itself is a negative for Korea, given Korea is exposed to Chinese domestic demand, supply chains, and the same global factor impacting China -- sharply slower growth in global trade,” Jackson said in a recent interview

July 10, 2016

Brokerages ignored risks to issue buy opinions on short-sold stocks: data

[THE INVESTOR] Local brokerages were reticent to issue sell opinions on stocks that were broadly short-sold, according to industry data on July 8. Of the top 20 stocks that were short-sold based on July 8 disclosures, more than 70 percent of securities firms here issued a buy opinion over the past three months.A total of 35 brokerages had issued neutral opinions, with just one having a sell opinion. Short-selling is essentially betting that a stock’s market value will decline. Investors sell sha

July 9, 2016

[ANALYST REPORT] LG Electronics: Shares at rock bottom, focus on business restructuring

2Q16 operating profit to meet consensus at W591bnMC division to narrow losses based on efficient operations ¨ Fundamentals to improve on ramp-up of EV parts business ¨ Retain BUY for a target price of W77,000LG Electronics is projected to have posted 2Q16 operating profit of W591bn (+17% QoQ, +142.3% YoY) on sales of W14.42tr (+7.9% QoQ, +3.5% YoY), meeting the consensus (W597bn). The figure is expected to have missed our previous projection (W626bn) with the G5 recording sluggish sales and LG I

July 8, 2016

[ANALYST REPORT] NAVER: LINE share price hike to bolster NAVER‘s shares

LINE’s IPO is fast approaching. Noting the recent increase in LINE’s IPO price band to JPY2,900~3,300, it appears that the LINE book building process garnered a positive response.2Q16 results to confirm domestic portal growth Our predictions place NAVER’s consolidated 2Q16 sales at W992.5bn (up 27.1% y-y, up 5.9% q-q) and operating profit at W261.6bn (up 56.5% y-y, up 1.9% q-q), with operating profit likely meeting consensus of W266.4bn.NAVER’s 2Q16 domestic advertising sales (which rallied 21.2

July 8, 2016

Issuance of DLS hits record high in H1

[THE INVESTOR] South Korea’s issuance of derivatives-linked securities has soared to a record level during the first half of the year as the upward trend in oil and gold prices continues, data showed on July 8. A total of 14 trillion won (US$12 billion) worth of derivatives-tied securities has been sold during the January to June period, up 3.3 percent year-on-year, according to data compiled by the Korea Securities Depository.It is the highest half-year figure so far. “Strengthening internation

July 8, 2016

Samsung Electronics’ operating profit to hit W29.5tr this year: Dongbu Securities

[THE INVESTOR] Dongbu Securities said on July8 that it will keep a “buy” opinion on Samsung Electronics shares as it expects the tech giant’s 0perating profit to increase 11.6 percent to 29.5 trillion won (US$2.5 billion) this year.The brokerage also kept unchanged the price target of 1.8 million won.On July 8, Samsung Electronics closed 0.69 percent higher at 1,460,000 won. Dongbu based the upbeat forecast on Samsung’s second-quarter operating profit, which stood at 8.1 trillion won, up 17.4 pe

July 8, 2016

Stocks end lower on heightened geopolitical risks

South Korean shares closed lower Friday as institutions sought to cash in early gains, while heightened geopolitical risks following a decision to deploy a U.S. tactical missile defense system in South Korea spooked investors.The local currency lost ground against the U.S. greenback.The benchmark Korea Composite Stock Price Index lost 10.98 points, or 0.56 percent, to 1,963.10. Trading volume came to 345.9 million shares, worth 4.07 trillion won ($3.5 billion), with losers outnumbering gainers 5

July 8, 2016

Demand growing for safer, short-term investment tools on uncertainties

[THE INVESTOR] The lingering uncertainties in the global financial markets including the impact of Britain’s latest decision to quit the European Union are fueling a demand for safer, short-term investment tools.As of the end of May, funds in fixed deposits of six months or less, money market funds and other short-term financial products reached 876.2 trillion won (US$ 756.9 billion), according to the Bank of Korea and Hana Institute of Finance.When adding assets which are considered stable, suc

July 8, 2016

LG Electronics says Q2 operating income more than doubles

LG Electronics Inc., South Korea's No. 2 tech giant, said Friday that its second-quarter operating profit is estimated to have more than doubled from a year earlier.The tech company's second-quarter operating income for the April-June period is estimated at 584.6 billion won ($503.3 million), up 140 percent from the 244 billion won posted a year earlier, the company said in its earnings guidance report. The estimates slightly hovered above the market consensus.According to data compiled by Yonha

July 8, 2016

Korean stocks down on institutional selling, political risks

South Korean shares closed lower Friday as institutions sought to cash in early gains while heightened geopolitical risks following a decision to deploy a U.S. tactical missile defense system in South Korea spooked investors.The local currency lost ground against the U.S. greenback.The benchmark Korea Composite Stock Price Index lost 10.98 points, or 0.56 percent, to 1,963.10. Trading volume came to 345.9 million shares, worth 4.07 trillion won ($3.5 billion), with losers outnumbering gainers 57

July 8, 2016

South Korean share prices down on THAAD decision

[THE INVESTOR] South Korean share prices declined on July 8 after the country and its main ally, the US, agreed to deploy a high-tech antiballistic-missile interception system in Korea. The benchmark KOSPI index closed 0.56 percent lower at 1963.01 points as exporting firms like cosmetic makers became big losers. Investor sentiment was down, analysts said, on concerns over the possibility of diplomatic tension with China and Russia following the THAAD decision. South Korea and the US agreed to d

July 8, 2016

Korea mulls separate FTA with Britain

South Korea is considering pushing for a fresh free trade agreement with Britain which chose to leave the European Union, or Brexit, as part of its efforts to deal with the fast-changing global trade environment, the finance ministry said Friday.In a minister-level meeting held in Seoul, the Ministry of Strategy and Finance said it will make various efforts to expand overall trade and minimize any possible Brexit spillover into the real economy, including signing a new FTA with Britain or upgrad

July 8, 2016

Korean shares down 0.61% in late morning trade

South Korean shares were down 0.61 percent late Friday morning on sell-offs by foreign and institutional investors.The benchmark Korea Composite Stock Price Index lost 11.97 points to 1,962.11 as of 11:20 a.m.The index got off on an upbeat note, but pared earlier gains after foreigners and institutions turned to selling on profit-taking.Most large caps were in negative terrain, while top cap Samsung Electronics remained one of the few gainers, advancing 0.90 percent.Leading automaker Hyundai Mot

July 8, 2016

Investors park more money in safe places amid uncertainty

Investors in South Korea are increasingly parking their money in safe places and managing them on a short-term basis amid increased uncertainties, data showed on Friday.The outstanding value of short-term financial products such as demand deposits and time deposits with a maturity of less than six months amounted to 876.2 trillion won ($757 billion) as of end-May, up 3.3 percent from 848.6 trillion won at end-December, according to the data compiled by the Bank of Korea. Such short-term deposits

July 8, 2016

Hyundai Motor says no decision yet over GE stake in Hyundai Capital

South Korea's carmaking giant Hyundai Motor Group said Friday no decision has been made yet over whether it will buy a 20-percent stake in its auto finance unit, Hyundai Capital, from its U.S. partner, General Electric Co.GE acquired a 43.3-percent stake in Hyundai Capital from Hyundai Motor Group for 620 billion won ($535 million) in 2004.Last year, the U.S. company sold 20.1-percent and 3.2-percent stakes in Hyundai Capital to Kia Motors and Hyundai Motor -- the flagship units of Hyundai Motor

July 8, 2016

Samsung further narrows gap with Apple in operating profit margin

The gap in the operating profit margins of South Korean tech giant Samsung Electronics Co. and its U.S. rival Apple Inc. is estimated to have further narrowed to single-digit percentage points in the second quarter of this year, market data suggested Friday.Samsung Electronics estimated Thursday that its sales reached 50 trillion won ($43.2 billion), with 8.1 trillion won in operating profits, in the April-June period, posting 16.2 percent in operating profit margin.The ratio of operating profit

July 8, 2016

Korea to manage foreign reserve in stable manner: finance minister

South Korea's finance minister on Friday pledged that the authorities will manage the country's foreign exchange reserve in a stable way to overcome the current exogenous headwinds stemming from the recent British vote to exit the European Union, or Brexit."To deal with rising financial uncertainties, we have to establish a firm safety valve," Finance Minister Yoo Il-ho said in a minister-level meeting in Seoul. "The economic authorities will work to manage foreign exchange reserves in a stable

July 8, 2016

Sampyo mulls IPO to repay debt

[THE INVESTOR] Sampyo, South Korea’s No. 2 ready-mixed concrete manufacture, plans to get listed to recoup its investment on the acquisition of Tong Yang Cement last year, sources said on July 8. “We are considering an initial public offering to improve our financial health in the long term as economic conditions in the construction industry are projected to deteriorate,” an official at Sampyo said.  SampyoAccording to investment bank officials, Sampyo sent out a request for proposals to brokera

July 8, 2016

LG Household shares hit record high

[THE INVESTOR] LG Household and Health Care shares closed at a record high of 1.181 million won (US$ 1,023) on July 7.With this rise, up 2.2 percent from the previous day, LG Household shares rose for the ninth consecutive trading day. The latest increase pushed up the company’s market capitalization to over 18.44 trillion won, placing it in 10th place on the benchmark KOSPI.The rise is thought to be fueled by LG Household’s stable base in China and steady performance. By Choi He-suk (cheesuk@he

July 7, 2016