Creditor calls for Samsung Heavy’s self-rescue plan

The main creditor bank of Samsung Heavy Industries has called on the shipbuilder to come up with self-rescue measures, in a move to speed up the government’s push in restructuring of the embattled shipbuilding segment hit by mounting losses and an industrywide slump, sources said Tuesday.The state-run Korea Development Bank officially demanded that Samsung Heavy submit self-restructuring plans on April 29, which could lead to job cuts and sales of noncore assets.“KDB asked (the firm) to map out

May 3, 2016

Monetary easing useful for growth, not for restructuring: HSBC

Korea can afford to implement more monetary easing to boost the economy amid weak growth, but not for the purpose of recapitalizing policy banks to finance restructuring of debt-laden companies, Frederic Neumann, an economist of HSBC, said.In a seminar on the Korean economy, Neumann, the head of HSBC’s Asian Economic Research, said that Korean quantitative easing is not QE in the conventional sense as practiced by other central banks like the Federal Reserve, European Central Bank or the Bank of

May 3, 2016

Korea’s mid-sized builders up for sale

Many mid-tier Korean construction companies have been put on the block in a bid to quickly close their debt workout programs.Kyeangnam Enterprises, going through a debt workout since early last year, said Friday that Samil PwC, the manager of its sale, is accepting letters of intent from potential bidders until May 27. After a month of due diligence, the accounting firm will proceed with the main bidding on June 30.  Korea M&A targeting construction companies in 2006-2016 (Source: Dealogic)The m

May 3, 2016

Seoul says it takes time to launch funds for corporate restructuring

Korea's finance minister said Monday that it will take time to decide the exact amount of bailout funds needed for corporate restructuring in Asia's fourth-largest economy.Talks of corporate restructuring funds have been making headlines in Korea as the government is pushing to restructure loss-making shipbuilding and shipping industries, among others, which have been a drag on the Korean economy struggling with slumping domestic demand and faltering exports. Finance Minister Yoo Il-ho (second f

May 3, 2016

KOSDAQ 'Rising Stars' suffer stock price decline

Leading companies listed on the tech-heavy KOSDAQ market have performed poorly in the past 12 months compared with other listed firms, the main bourse operator said Tuesday. For the year ended May 2, the 28 companies designated as "Rising Stars" last year by the Korea Exchange (KRX) for their advanced technologies and growth potential in global markets suffered a decline of 1.89 percent in their stock prices, the KRX said in a statement. The poor performances contrasted with a 0.18 percent gain

May 3, 2016

Central bank's loans to support SMEs near W20 tln

Loans extended by Korea's central bank to local lenders to support small and medium-sized firms have climbed to a record high, the central bank said Tuesday.According to the Bank of Korea (BOK), such loans to local banks came to 19.65 trillion won ($17.27 billion) as of end-April, up 4.9 percent, or 918 billion won, from three months earlier. Bank of Korea (Yonhap)The April tally marks the highest level since the central bank began compiling such data in 1971.The increase follows a decision by t

May 3, 2016

Korean shares open higher on Wall Street gains

Korean stocks started higher Tuesday on strong sentiment in New York. The benchmark Korea Composite Stock Price Index (KOSPI) rose 7.25 points, or 0.37 percent, to 1,985.40 in the first 15 minutes of trading.Top market cap Samsung Electronics rose 0.56 percent, and industry frontrunner Hyundai Motor gained 0.35 percent.State-run Korea Electric Power Corp. added 0.16 percent and leading steelmaker POSCO was up 0.66 percent.  On Monday, the Dow Jones Industrial Average added 117.52 points, or 0.66

May 3, 2016

KOSPI down ahead of key data release

Korean share prices closed lower Monday as investors sat on the sidelines ahead of the release of key economic indicators later this week. The Korean won rose against the U.S. dollar.The benchmark Korea Composite Stock Price Index lost 16 points, or 0.8 percent, to 1,978.15. Trade volume stood at 324.38 million shares worth 3.84 trillion won ($3.77 billion), with losers outnumbering gainers 616 to 200. KOSPI share prices are displayed at the Korea Exchange. (Yonhap)Analysts said investors were w

May 2, 2016

Corporate pension plans need improvements: experts

Corporate pension plans have grown fast in the past decade but their quality still remains outdated to provide stable and high returns for future retirees in rapidly aging Korean society, experts said.Korea enacted the Employee Retirement Benefit Security Act in 2005 to allow companies to set up an external fund for retirement plans as an alternative to the previously popular severance pay system.The need for corporate pension plans has become more evident as the public pension, National Pension

May 2, 2016

[Market Now] Lotte Capital invests in PS Net CPs

Lotte Capital has invested 5 billion won ($4.4 million) in commercial papers of its affiliate Lotte PS Net, an IT system and database developer of Lotte’s Korea Seven.Lotte PS Net said that it plans to use the proceeds to finance its operations.Korea Seven is an operator of Lotte’s 7-Eleven convenient stores. Korea Seven’s biggest shareholder is Lotte Shopping, according to an audit filing.By Park Hyong-ki (hkp@heraldcorp.com)

May 2, 2016

Korean banks’ toxic loans at 15-year high

Soured loans at Korea’s commercial banks rose to a 15-year high last year on a sharp deterioration in big-company debt quality, data showed Monday.According to the Financial Supervisory Service, local banks’ nonperforming loans totaled 29.9 trillion won ($26.3 billion) at the end of 2015, up 5.7 trillion won from a year earlier. Of total loans, toxic debt accounted for 1.71 percent, up 0.16 percentage point from a year ago. Last year’s bad-debt level was the highest since 2000, when post-crisis

May 2, 2016

Seoul shares down 0.8% ahead of key data release

Korean stocks closed lower Monday as investors took a wait-and-see stance ahead of the release of economic indicators later this week, analysts said. The Korean won rose against the U.S. dollar.The benchmark Korea Composite Stock Price Index (KOSPI) dropped 16 points, or 0.8 percent, to 1,978.15. Trade volume was moderate at 324.38 million shares worth 3.84 trillion won ($3.77 billion), with losers outnumbering gainers 616 to 200.Analysts said investors awaited the releases of the U.S. Institute

May 2, 2016

Fading headwinds open way for Paradise to start slow recovery

Paradise, Korea’s largest foreigners-only casino operator, may show a gradual rebound in the latter half of the year, following strong headwinds faced by the country’s casino industry last year. The recovery of Paradise, which runs casinos in three major cities in Korea and on Jejudo Island, will continue at “a modest pace” this year and its new resort Paradise City, which is under construction in Incheon, will help the company to attract more VIPs from 2017, analysts said.The headquarters of Pa

May 2, 2016

[Market Now] Yongpyong Resort to finance real estate development with IPO

Yongpyong Resort said Monday that it is seeking to raise 135.4 billion won ($118.8 million) by issuing 16.7 million common shares for an initial public offering.In a regulatory filing, Korea’s third largest resort and hotel operator by sales said it will use the IPO proceeds to finance the construction of a condominium, apartments for Olympic athletes at the 2018 PyeongChang Winter Olympics and a budget hotel, as well as repay its debt to state-run Korea Development Bank. Yongpyong Resort (Yonha

May 2, 2016

Banks' bad loans surge to 15-year high in 2015

The amount of bad loans extended by local banks surged to a 15-year high last year, largely due to a rise in the amount and rate of soured corporate loans, industry data showed Monday.As of the end of 2015, the total amount of bad loans held by local banks came to 29.98 trillion won ($26.21 billion), up from 24.21 trillion won a year earlier, according to the data from the Financial Supervisory Service (FSS). Lending section of a commercial bank branch in Seoul (Yonhap)The 2015 figure marks the

May 2, 2016

Korean banks' FX turnover hits all-time high in Q1

Daily foreign exchange turnover by Korean banks hit a new quarterly high in the first three months of the year, partly due to an increase in non-deliverable forward (NDF) trading, the central bank said Monday.The daily FX turnover came to $52.99 billion in the three months ended March 31, up $6.32 billion from the previous quarter, according to the Bank of Korea (BOK).The Q1 reading marks the highest level, replacing the previous quarterly high of $52.85 billion tallied in the first quarter of 2

May 2, 2016

[Market Now] GS Retail to sell real estate

GS Retail, a listed operator of convenience stores, said that it will retain advisors for the sale of real estate holdings owned by its project financing vehicle subsidiary KOCREF G.Square next week.The retail giant of GS Group said that it will disclose the details after a sales advisor is selected and plans are finalized for liquidation of the real estate.The company did not disclose as to why and which properties it was selling.However, news reported that GS Retail has been suffering losses o

May 2, 2016

Seoul shares open lower on autos, shipbuilders

South Korean share prices started lower on Monday on losses from carmakers and shipbuilders.The benchmark Korea Composite Stock Price Index fell 8.19 points, or 0.41 percent, to 1,985.96 in the first 15 minutes of trading.Traders monitor South Korean share prices at a local bank. (Yonhap)Industry heavyweights such as Hyundai Motor and Hyundai Heavy Industries were trading lower in mid-morning, along with Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering. (khnews@heraldcorp.co

May 2, 2016

Korea moves to finance restructuring

Korea is expected to launch a task force comprising officials from finance and regulatory agencies to exchange opinions and discuss ways to increase the capital base of state-run policy banks for massive restructuring of cash-strapped shipping and shipbuilding companies.This comes as the Financial Services Commission, the top financial regulator, unveiled its initial plan to launch creditor-led debt restructuring last week, citing the need to increase capital buffers of the state-owned Korea Dev

May 1, 2016

U.S. designation not to change Korea’s FX policy

The U.S. inclusion of Korea in the foreign exchange monitor list will not affect Seoul’s monetary policy, Korean economic policymakers said Sunday. “As Korea avoided the currency manipulator designation, there won’t be any significant changes in the forex polices,” Finance Minister Yoo Il-ho was quoted as saying. Finance Minister Yoo Il-ho (Yonhap)“Although Korea is included in the monitoring list, this always happens with the U.S. department. There will be no changes (in the country’s policies)

May 1, 2016