Woori Bank needs to sharply increase provisions to retain top rating

[THE INVESTOR] Woori Bank needs to set aside loan-loss provisions of 700 billion won (US$ 594 million) to maintain its credit rating of AAA, credit rating agencies said on June 24. Woori Bank’s BIS capital adequacy ratio declined to 13.5 percent as of the end of the first quarter, the lowest level among commercial banks. Due to its exposure to debt-laden shipping and shipbuilding companies, the ratio has been plunged from 15.5 percent to 13.7 percent during two years between 2013 and 2015. Accor

June 24, 2016

Seoul stocks, currency stung by Brexit rout

Korea's financial market was roiled Friday by Britain's exit from the European Union, with the local stock market plunging over 3 percent and the local currency nosediving.The country's benchmark Korea Composite Stock Price Index shed 70.43 points, or 3.55 percent, to 1,916.53 as of 2:20 p.m. From a session earlier, the Korean won fell 28.20 won, or 2.6 percent, against the U.S. dollar to trade at 1,178.40 won.  (Yoon Byung-chan /The Korea Herald)The main index opened up at 2,001.55 but turned l

June 24, 2016

Korea revises down growth outlook to 2.8 percent

[THE INVESTOR] Korea has revised its annual economic growth rate outlook for 2016 to 2.8 percent from the previous 3.1 percent, the government said on Friday.During a meeting with the ruling Saenuri Party, government policymakers said growth is expected to slow in the second half of 2016. “If the second-half economic policy plan is executed as  Finance Minister Yoo Il-ho at a meeting with the ruling Saenuri Party (Park Hae-mook/The Investor)expected, this year’s growth will decrease from (the) i

June 24, 2016

Korea’s dependence on China poses risks and opportunities

[THE INVESTOR] Korea’s high economic dependence on China is a double-edged sword, a report said on Friday.In a report titled “China’s choice,” the McKinsey Global Institute ranked Korea fourth in the world in terms of economic dependence on China. According to the report, Korea is fourth in the world in terms of the proportion of gross domestic product raised from exports to China. Oman showed the highest dependence followed by Angola and Malaysia. Korea’s economy is highly trade reliant. About

June 24, 2016

Korea's financial market stung by Brexit rout

Korea's financial market was roiled Friday by Britain's exit from the European Union, with the local stock market plunging over 3 percent and the local currency nosediving.The country's benchmark Korea Composite Stock Price Index shed 66.62 points, or 3.35 percent, to 1,918.58 as of 2:00 p.m. From a session earlier, the Korean won fell 29.00 won, or 2.5 percent, against the U.S. dollar to trade at 1,170.05 won. The main index turned lower on Friday morning as early vote results on Britain's EU m

June 24, 2016

Korean investments in Chinese stocks down

[THE INVESTOR] The total transactions of Chinese shares by Koreans dropped by 81.7 percent to US$510,000 this year through June 21 from US$4.14 million a year earlier, the Korea Securities Depository said June 24. China’s stock market was hammered earlier this year due to concerns about its slowing economy. After suffering heavy losses from their investments in Chinese shares, Korea’s retail investors withdrew some of their assets to avoid further losses. Korean investors poured a total of $4.29

June 24, 2016

Koreans' appetite for China stocks subsides after meltdown

Koreans' transactions involving Chinese stocks plunged to $510,000 this year through June 21 from $4.14 million a year earlier, the Korea Securities Depository said Friday. China's stock market was pummeled early this year by growing concerns about its slowing economy. After suffering heavy losses from their investments in Chinese shares, Korea's retail investors have withdrawn some of their assets parked there to avoid further losses. Korean investors poured a total of $4.29 million into Chines

June 24, 2016

Seoul shares turn lower on Brexit uncertainties

Korean shares turned lower late Friday morning as the results of the British referendum remain murky.The benchmark Korea Composite Stock Price Index edged down 11.55 points, or 0.58 percent, to 1,975.16 as of 11:20 a.m. One of the latest polls conducted after the vote ended at 6 a.m. Friday (Korean time) suggested the "Remain" camp's victory.But early voting results indicated a tight race so investors remain cautious until the final voting outcome is available at around 3 p.m. Friday. Top carmak

June 24, 2016

[ANALYST REPORT] KAI: Ample momentum in store for 2H

We now believe KAI is highly likely to win the bid for both of the major projects set to determine its growth potential, i.e., the aircraft maintenance, repair, and overhaul (MRO) service project in Korea and the US Air Force‘s T-X project. We also expect marked HoH improvement in its new order intake in 2H16, given: 1) the scheduled receipts of new orders by both the defense and aircraft parts divisions; and 2) likely additional exports of finished aircraft. With KAI forecast to report relative

June 24, 2016

Seoul stocks open higher on hopes UK will remain in EU

[THE INVESTOR] South Korean shares opened higher on June 24 as the first poll after the Brexit vote on June 23 showed signs of Britain remaining in the European Union. The benchmark Korea Composite Stock Price Index soared 8.68 points, or 0.44 percent, to 1,995.39 during the first 15 minutes of trading.South Korean shares opened higher on June 24 as initial poll results showed Britain may stay with the EU. Lee Sang-sub/The InvesterAll eyes are on the outcome of the Brexit poll due out at around

June 24, 2016

POSCO’s Q2 operating profit to miss expectations: analyst

[THE INVESTOR] NH Investment & Securities has maintained a buy rating on POSCO and kept the price target of 300,000 won (US$ 261.50) on projection that the firm will continue its earnings improvement due to the increase in steel prices. “POSCO’s second-quarter sales will meet expectations but its operating income will fall shy,” analyst Byun Jong-man said.He expects the steelmaker’s consolidated sale for the second quarter to decrease 8.3 percent on year to 13.92 trillion won and its operating p

June 24, 2016

KB Financial Group benchmarks BoA-Merrill Lynch merger

[THE INVESTOR] KB Financial Group, Korea’s leading banking group, seeks to set up a universal banking system to provide a wide variety of financial services from insurance to investment services, the firm said on June 23.After acquiring Hyundai Securities in April, the operator of KB Kookmin Bank plans to diversify its business portfolio to depart from its role of offering traditional financial products such as deposits and installment savings. Wealth management business and commercial investmen

June 23, 2016

BioLeaders to go public in July

[THE INVESTOR] Korean pharma company BioLeaders will list on the secondary bourse KOSDAQ on July 7.Established in 1999, the company develops drugs for immune disorders and other incurable diseases. CEOs of BioLeaders: Sung Moon-hee (left) and Kim Sang-sukPrior to listing on the tech-heavy KOSDAQ, BioLeaders was traded on KONEX -- a securities exchange exlusively for small and medium enterprises and venture companies. It will issue 1.2 million shares within the range of 11,000 won (US$9.5) to 15,

June 23, 2016

Under fire, KDB plans faster withdrawal from bailed-out companies

Korea Development Bank, a state policy bank under fire for mismanagement of bailed-out companies, said Thursday it would exit from its ownership of 46 companies this year, raising the count by 10 from its earlier plan. “From 2016 to 2018, we’ll be exiting from our investments in 132 nonfinancial companies,” the Seoul-based bank said in a statement.  Korea Development Bank headquarters (Yonhap)After the planned 46 sales this year, the auction process will begin for 44 companies in 2017 and for an

June 23, 2016

HMM mulls joining 2M Alliance

[THE INVESTOR] Hyundai Merchant Marine is considering joining the 2M Alliance, a vessel-sharing agreement between Denmark’s Maersk Line and Switzerland’s Mediterranean Shipping Company -- the world’s first and second largest container carriers. Amid growing speculation that Korea’s second-largest shipping company is set to join the alliance, a HMM official confirmed that discussions are ongoing with the alliance parties on June 23. Previously, HMM had tried to enter another six-party partnership

June 23, 2016

Samsung SDS shareholders call on NPS for support

[THE INVESTOR] Minor shareholders of Samsung SDS are reaching out to the National Pension Service in their fight against the company’s reorganization plans. Samsung SDS is reviewing plans to spin off some of its businesses including the logistics operations. Since Oct. 19, Samsung SDS stock has been on a downward slope with prices down by half since then. The minor shareholders’ association has put the blame squarely on the company’s spin-off plans, and has been demanding action from Samsung SDS

June 23, 2016

KRX to reform commission system

[THE INVESTOR] Korea Exchange plans to revamp its commission fee structure, the country’s bourse operator said on June 23. KRX will hire an external agency to examine its current commission rate and standards on the imposition of fees and compare it with other major stock exchanges worldwide.The decision comes as the country’s stock market faces an industrial transition as the exchange seeks to transform itself as a holding firm and financial authority pushes to adopt alternative trading system

June 23, 2016

Hanwha to face profit squeeze after new preferred share issurance

[THE INVESTOR] Hanwha Corp.’s decision to raise 400 billion won by issuing new preferred shares may lead to profit squeeze due to growing dividend payments, NH Investment & Securities said in a report on June 23. The trading unit of Korean conglomerate Hanwha Group said that it would issue new 20 million preferred stocks to enhance its financial stability in a regulatory filing on June 22. Hanwha GroupShares of Hanwha shed 1.08 percent to trade at 36,700 won ($US31.90) as of 2:22 p.m.Kim Dong-ya

June 23, 2016

Seoul stocks end 4-day straight rise ahead of Brexit vote

Korean shares closed lower Thursday snapping a four-day consecutive rise, as investors wait for Britons to cast their ballots to decide whether to exit from the European Union. The local currency rose against the U.S. dollar.  The benchmark Korea Composite Stock Price Index fell 5.87 points, or 0.29 percent, to 1986.71. Trade volume was moderate at 449.59 million shares worth 4.16 trillion won.As the biggest issue in the market is the upcoming British referendum, investors took to the sidelines

June 23, 2016