Korea Exchange Bank and its biggest shareholder Lone Star Funds lost an international suit filed by Olympus Capital, the formerly second-largest shareholder of KEB’s credit card affiliate. 　The International Court of Arbitration of Singapore, in its recent verdict, ordered KEB, Lone Star and three other parties to pay Olympus Capital $37.3 million (43 billion won) with arrear of interest of 5 percent per annum.　The equity fund Olympus Capital had argued that KEB breached its contract with the th

Dec. 21, 2011

The death of North Korean leader Kim Jong-il could make it tough for local banks and firms to sell foreign currency-denominated bonds due to heightening geopolitical risks, a report showed.In particular, the sale of Samurai bonds denominated in the Japanese currency could be affected as Japanese investors may be more cautious about developments in their neighboring country, according to a report by the Korea Center for International Finance.“The sale of Samurai bonds has been brisk this year, bu

Dec. 21, 2011

Gold prices in South Korea have climbed following the death of North Korean leader Kim Jong-il as worries over heightened geopolitical uncertainties and a strengthening greenback prompted investors to stack up the safe-haven asset, data showed Wednesday.The retail price of 1 don of pure gold in South Korea stood at 238,000 won ($205.99) as of Tuesday, rising the most in five days since 241,000 won on Dec. 14, according to the Korea Gold Exchange.The don (3.75 grams) is a Korean unit used to meas

Dec. 21, 2011

Korea Life Insurance Co., South Korea’s second-largest life insurer, said Wednesday it will launch a joint venture in China in a bid to tap into the world’s second-largest economy.Korea Life Insurance signed an agreement Tuesday with China’s state-run fund provider Zhejiang International Business Group Co. to set up a joint life insurer in Hangzhou, the provincial capital of Zhejiang, the Korean insurer said in a statement.The 50-50 joint venture will be capitalized at 500 million yuan ($78 mill

Dec. 21, 2011

South Korea will lower tariffs on a total of 103 products next year in a bid to help stabilize prices of goods frequently consumed by ordinary citizens, farmers and small enterprises, the Finance Ministry said Tuesday.The items, whose tariffs will be temporarily lowered or removed throughout next year under the tariff quota system, will include raw sugar, pork, garlic and butter, according to the Ministry of Strategy and Finance. There will be less products than the 112 imports that were eligibl

Dec. 20, 2011

South Korea’s corporate profitability worsened in the third quarter from a year earlier as increased commodity prices drove up costs and other expenses, the central bank said Tuesday.The average ratio of operating profit to sales, a key barometer of profitability, came in at 5.3 percent in the July-September period, down from 7.4 percent in the previous year, the Bank of Korea said in a report based on a survey of 1,522 listed companies.The result marked the second straight quarterly decline. Af

Dec. 20, 2011

The nation’s two largest private lenders face suspension for allegedly charging some borrowers illegal interest rates, officials said on Tuesday.Gangnam Ward Office of Seoul, which has investigated these practices in coordination with the Financial Supervisory Service, said Tuesday that it would halt the operations of Rush N Cash and Sanwa Money soon.The private loan industry’s No. 1 player Rush N Cash and No. 2 player Sanwa Money have been suspected of violating the upper ceiling of 39 percent

Dec. 20, 2011

South Korea‘s economy will likely grow 3.4 percent in 2012, down from 3.8 percent growth projected for this year, as global economic uncertainties affect exports, a private think tank said Tuesday. In its outlook for next year, LG Economic Research Institute said sluggish growth in industrialized economies is expected to hurt demand for durable goods and related parts. Such developments can directly impact the country’s outbound shipments.The institute said there may be some improvements in dome

Dec. 20, 2011

The sudden death of North Korean leader Kim Jong-il will likely have a limited impact on South Korea's financial markets, a senior finance ministry official said Tuesday, citing relatively stable overnight offshore market situations.South Korea's stock and currency markets tumbled on Monday, sparked

Dec. 20, 2011

The number of South Korean corporate bankruptcies jumped to a seven-month high in November, the central bank said Monday, raising concerns at signs of an economic slowdown.The number of companies that went belly-up totaled 130 last month, up from 118 in October, according to the Bank of Korea.The figure is the highest since 134 bankruptcies registered in April. The BOK added that the number of newly set-up firms reached 5,432 in November, growing 358 from the previous month.The default rate of c

Dec. 19, 2011

South Korea plans to actively use its tariff quota system to cope with supply-side instability that can fuel inflationary pressure in 2012, the finance minister said Monday.In a meeting with economic policymakers, Bahk Jae-wan said Seoul plans to use the flexible tariffs to stabilize prices of products that may experience supply shortfalls.“There may be supply problems with products such as rice, dried chili peppers, garlic and pork in the coming months that can affect consumer prices,” he said.

Dec. 19, 2011

South Korea is seeking to create an Asian financial safety next year as part of the Chiang Mai Initiative Multilateralization regime to better insulate the regional economies from a worldwide financial meltdown, the country’s senior economic policymaker said Monday.Speaking at the G20 global economic cooperation conference hosted by the Korea Development Institute, Finance Minister Bahk Jae-wan said that there is support and sympathy for setting up a regional precautionary credit line. The plan

Dec. 19, 2011

South Korea’s real interest rate remained in negative territory for the 25th straight month in November, data showed Monday, raising concerns the trend will continue into next year amid a possible global economic downturn.The real interest rate, or the benchmark interest rate minus the consumer inflation rate, stood at minus 1 percent in November, according to the data compiled by the Bank of Korea.The November figure extended the minus real interest rate period to its longest streak since the B

Dec. 19, 2011

By Yang Sung-jinSouth Korea’s stock market has demonstrated the most volatility of any market worldwide this year, data showed on Monday.Even aside from the turbulence sparked by the news of Kim Jong-il’s death, the financial industry’s data suggests that Korean investors rode a roller coaster ride this year, thanks to greater external uncertainties.The eurozone sovereign debt crisis, the growing local derivatives market and heavy reliance of the Korean economy on trades added to volatility, bro

Dec. 19, 2011

By Cynthia J. KimThe death of North Korean leader Kim Jong-il sparked immediate concern in the market, pushing the won to a two-month low against the dollar and dropping Seoul stocks to a three-week low.The benchmark KOSPI lost 3.43 percent and closed at 1,776.93 after sliding as much as to 1,750.60 at around noon when North Korea announced that the communist leader died on Dec. 17. The local currency lost 1.4 percent to 1,174 won against the greenback after dipping as low as 1,179.95. The junio

Dec. 19, 2011