[News Analysis] Korean stocks not likely to gain developed status in long run

South Korea is not likely to get its stock market included in the Morgan Stanley Capital International’s Developed Markets in the long run, as the financial authority remains unchanged over its currency exchange regulations, financial regulators and analysts said.The MSCI announced Tuesday in New York that the global index provider will not include Korea on its “review list” for potential reclassification of its stock market to advanced status at least until after 2017.“The recent changes announ

June 15, 2016

Doubt over listing of KEPCO’s power generation units rising

[THE INVESTOR] The stock-listing of six power generation affiliates of state-run Korea Electric Power Co. that the government proposed Tuesday may face difficulties mainly due to insufficient investor interest, market watchers said. “Despite the government’s expected strong push in the latter part of this year, partial public stock offering of a state-run company is likely to face little interest from investors,” said Yoon Hee-do, a stock market analyst from Korea Investment & Securities. The ta

June 15, 2016

Korean stocks not likely to gain developed status in long run

[THE INVESTOR] South Korea is not likely to get its stock market included in the Morgan Stanley Capital International’s Developed Markets in the long run, as the financial authority remains unchanged over its currency exchange regulations, financial regulators and analysts said.The MSCI announced Tuesday in New York that the global index provider will not include Korea on its “review list” for potential reclassification of its stock market to advanced status at least until after 2017.“The recent

June 15, 2016

Record-low interest rates leading to weak deposit rates of Korean banks

[THE INVESTOR] With the Bank of Korea reducing its policy rate to a record low of 1.5 percent, interest rates paid by local banks have dropped to zero percent, which could mean negative returns on bank deposits when adjusted for price inflation, according to market observers on June 15. According to the observers, Citibank Korea has cut the annual interest rate on its savings accounts for companies to 0.01 percent from 0.1 percent. A 0.01 percent interest rate submits 1,000 won ($0.85) per year

June 15, 2016

KDB’s neglect fueled Daewoo Shipbuilding crisis

[THE INVESTOR] Daewoo Shipbuilding and Marine Engineering’s current difficulties were fueled by neglect by its biggest shareholder Korea Development Bank, the Board of Audit and Inspection announced on June 15. According to the BAI, the state-run bank neglected its duty in monitoring the shipbuilder’s accounts and financial stability. The KDB holds 49.7 percent of DSME, making it the biggest shareholder as well as the shipbuilder’s main creditor. According to BAI, KDB did not analyze the shipbui

June 15, 2016

[Photo News] Probe into offshore tax evasion suspects

Han Seung-hee, a director general at the National Tax Service, announces Wednesday that the NTS had launched a probe into 36 suspects of offshore tax evasion who failed to report their financial statements. (Yonhap)

June 15, 2016

Civil group to sue Samsung vice chairman Lee for malpractice

[THE INVESTOR] One of Korea’s largest civic groups will be lodging a complaint against the top management of construction and trading firm Samsung C&T, Samsung Electronics vice chairman Lee Jae-yong and the state pension fund, the National Pension Service, for malpractice and stock price manipulation in the merger of Cheil Industries and Samsung C&T in 2015.The People’s Solidarity for Participatory Democracy claimed Wednesday that the merger between Cheil Industries and Samsung C&T was made to b

June 15, 2016

New tank will bring changes to raw material prices: Hanwha Total

[THE INVESTOR] Hanwha Total Petrochemical Co. announced on June 15 the completion of a large propane storage tank at its plant in Daesan, South Chungcheong Province. The tank has a storage capacity of 40,000 metric tons and will be used to store propane gas. Hanwha Total said that the large storage tank will enable it to respond effectively to changes in raw material prices. Liquefied petroleum gas consists mainly of propane and butane. In Korea, the gas is used for a wide range of purposes incl

June 15, 2016

[ANALYST REPORT] Few benefits of company size redesignation

Strategy briefing• Korea’s Fair Trade Commission (FTC) last week announced new measures for the nation’s corporate designation system, with the key revision changing the definition of a “large” company from one with assets of KRW5t or more to KRW10t or more, which will likely affect 37 domestic firms (including 20 listed ones).• The amendments—except those governing profit-taking by majority stakeholders of chaebol (eg, from intra-group transactions) and select firms subject to obligatory disclo

June 15, 2016

LINE skips dividend payout

[THE INVESTOR] LINE Corp., the messaging app arm of South Korea’s popular web portal Naver, has not been paying dividends to its shareholders and Seoul headquarters, according to documents on June 15. According to documents recently submitted to Tokyo’s main bourse operator, the Japan Exchange Group Inc. and the U.S.-based Securities and Exchange Commission, LINE has never issued dividends since it was launched in 2000. On the issue, the company elaborated about its dividend plans in the submitt

June 15, 2016

S.Korea‘s economic output edged up 0.7 % in 2014

[THE INVESTOR] South Korea‘s economic output increased in 2014 from a year earlier, a central bank report showed Wednesday.But output by the manufacturing sector fell, along with the portion of trade in total supply also shrinking. Busan PortThe country’s total supply, which equals total consumption, came to 4,237.8 trillion won ($3,598.1 billion) in 2014, up 0.7 percent from the previous year, according to the Bank of Korea. The reading was a turnaround from a 0.2 percent on-year drop in the pr

June 15, 2016

DSME confirms ex-employee stole 18 billion won

[THE INVESTOR] Daewoo Shipbuilding and Marine Engineering Co. confirmed that a former employee had embezzled 18 billion won ($15.3 million), in a disclosure notice on June 15. The notice confirmed news reports that a former employee had embezzled a total of 18 billion won and that the suspect is currently in custody of the authorities. The company said that it filed a criminal complaint against the suspect in January over the alleged embezzlement of 6 billion won, and that evidence implicating t

June 15, 2016

Samsung C&T accused of penalizing child care leave takers

[THE INVESTOR] Samsung C&T Corp. is in hot water over alleged discrimination of employees who take child care leave. According to a report by a local broadcaster, the company has been forcing workers who take child care leave to sign a document that frees the company from responsibility should the employee be penalized for taking such leave. The document, which was allegedly signed by an in-house lawyer at Samsung C&T, apparently states that an employee taking child care leave will not take issu

June 15, 2016

[ANALYST REPORT] Cheil Worldwide: End of uncertainty and start of recovery

Talks with global advertising agencies end without any agreementDiscussions on cooperation between Cheil Worldwide’s major shareholders and global ad agencies ended without any agreement, according to the Data Analysis, Retrieval and Transfer (DART) System of the Financial Supervisory Service. Publicis and Samsung ended talks for the acquisition of Cheil Worldwide. The company also said that no talks are underway with a third party on the majority stake sale, dismissing rumors about disposal to

June 15, 2016

Korea’s export prices fell 4% in May

[THE INVESTOR] South Korea’s export prices fell 4 percent in May to post a fifth straight month drop on-year,  according to central bank data on June 15. But compared to April, the prices gained 2.4 percent. The on-month increase was largely credited to the weakening of the local currency, which traded at an average 1,171.51 won against the dollar in May, 2.1 percent drop from an average 1,147.51 won in the previous month, according to the central bank. Export prices of industrial goods decrease

June 15, 2016

Messaging app Line forgoes dividends to shareholders

Global messaging app operator Line Corp., wholly owned by South Korea's internet giant Naver Corp., has never paid out dividends to its Seoul-based parent firm, documents showed Wednesday.Line has not delivered any dividends to its shareholders since its foundation in 2000, according to the documents submitted to the Japan Exchange Group Inc., Tokyo's main bourse operator and the U.S.-based Securities and Exchange Commission."Divided payout in the future will be decided on various factors such a

June 15, 2016

Unemployment rate in South Korea fell to 3.7% in May

[THE INVESTOR] Although the youth unemployment rate in South Korea remains high, it fell slightly in May, with a rise in employment in the health and accommodation industry, according to a government report on June 15. According to the report by Statistics Korea, the fourth-largest economy in Asia had a jobless rate of 3.7 percent last month, compared to 3.9 percent in April. The seasonally adjusted unemployment rate remained flat at 3.7 percent in May. Job creation soared compared to the previo

June 15, 2016