Minimum wage needs balanced, flexible approach

[THE INVESTOR] Labor and management representatives continued to run parallel last week at the fourth and latest round of negotiations on setting the minimum wage across the country next year.Labor groups insist that the 2017 minimum wage should be pegged at 10,000 won ($8.59) per hour, up 65.8 percent from 6,030 won this year, while business circles call for a freeze.According to data from the Minimum Wage Commission, Korea’s minimum wage rose by an annual average of 8.7 percent over the 15 yea

June 20, 2016

Kolmar Korea under tax investigation

[THE INVESTOR] Beauty and pharmaceutical company Kolmar Korea is under investigation by tax authorities in what appears to be a targeted probe into the controlling family.Dozens of employees of the National Tax Service raided the firm‘s headquarters on June 9, seizing financial records.The NTS investigation comes a year before Kolmar Korea’s scheduled regular tax audit. Industry watchers say the sudden investigation is closely linked to allegations that CEO Yoon Dong-han misappropriated the hold

June 20, 2016

Depositors’ frustration

[THE INVESTOR] Bank of Korea’s cut in the benchmark rate has lowered commercial banks’ interest rate offering on deposits to a record-low level.Commercial banks say they -- as well as depositors -- are also suffering low profitability as a result of the BOK’s all-time low base rate of 1.25 percent. Over the past two years, the central bank has lowered the rate by 125 basis points from 2.5 percent in July 2014. A savings product offered by a commercial bank provides customers with only a 0.01 per

June 20, 2016

WeMade struggles to launch next big hit

[THE INVESTOR] WeMade Entertainment, once a dominant game developer and publisher, is facing a slowdown as it struggles to release a game that can be a hit at home and abroad. The KOSDAQ-listed gamer, which brought fans blockbuster games such as “Candy Pang” and “Wind Runner,” performed below expectations in the first half of this year, with its highly anticipated role-playing action game “Soul & Stone” flopping early this year.Wemade‘s “Wind Runner” (WeMade)The company spent about 6 billion won

June 20, 2016

Coreana signs W285b supply deal with Chinese retailer

[THE INVESTOR] Korean cosmetics maker Coreana on June 20 signed a 285 billion won (US$ 245 million) supply deal with China’s Y&F.Under the contract, the Chinese firm will import and market Coreana’s Orthia brands cosmetics products over the next five years. Korean retailer Songjung will act as Y&F’s import channel for the cosmetics. Coreana said that the deal will provide the company with diverse marketing channels in China. By Choi He-suk (cheesuk@heraldcorp.com)

June 20, 2016

Railway-related stocks surge on national railroad network plan

[THE INVESTOR] Railway-related stocks surged on June 20 as the Korean government confirmed its national railroad network plan . Shares in Hyundai Rotem, the country’s train manufacturer, rose 6.69 percent to close at 18,350 won (US$15.79). The company’s first vendor Daeho AL closed at 2,750 won, up a whooping 21.41 percent. Stocks listed on the secondary market KOSDAQ including Woowon Development and DAEATI hit the upper price limit. Korea Train Express.On June 17, the Ministry of Land, Infrastr

June 20, 2016

Samsung C&T shares rally on hopes of holding firm transformation

[THE INVESTOR] Shares of Samsung C&T, the fashion and trading arm of Samsung Group, continued to rally June 20 on expectations that it would benefit from the group’s ongoing corporate restructuring. Its shares closed at 122,000 won (US$105.04), up 2.09 percent from the last trading session on June 17 when it climbed 3.46 percent. “If Samsung C&T successfully transform itself as the holding company of Samsung Group, it will secure more than 20 percent of Samsung Electronics’ business units and ot

June 20, 2016

Seoul shares close higher on eased Brexit concerns

[THE INVESTOR] South Korean stocks closed higher on June 20 on eased concerns over the UK’s exit from European Union following a lawmaker’s murder. The benchmark Korea Composite Stock Price Index increased 27.72 points, or 1.42 percent, to close at 1,981.12. Trade volume was moderate at 385 million shares worth 3.9 trillion won (US$3.3 billion), with winners outnumbering losers 658 to 169. The KOSPI rose from the revived risk-on appetite after the latest Brexit polls showed voters favor Britain

June 20, 2016

Ratings agency downgrades major shipping companies and shipyard

[THE INVESTOR] Korea Investors Service, one of the big three rating agencies here, downgraded the credit ratings of Hanjin Shipping, Hyundai Merchant Marine and Daewoo Shipbuilding & Marine Engineering on June 20. The agency lowered DSME from BB+ to BB, with its rating outlook also remaining negative. HMM received a downgrade from A+ to A, citing its continuous deficit, while Hanjin Shipping, struggling container operator who recently sought creditor-led restructuring to avoid bankruptcy, also f

June 20, 2016

Seoul stocks rebound on eased Brexit woes

South Korean stocks closed higher on Monday on eased concerns over a British exit from the European Union following a lawmaker's death. The Korean won rose against the U.S. dollar.The benchmark Korea Composite Stock Price Index rose 27.72 points, or 1.42 percent, to close at 1,981.12. Trade volume was moderate at 385 million shares worth 3.9 trillion won, with winners outnumbering losers 658 to 169.  (Yonhap)The KOSPI got a boost from the revived risk-on appetite after the latest Brexit polls in

June 20, 2016

M&A deals reshape local brokerage industry landscape

[THE INVESTOR] Mergers and acquisitions among midsized brokerages will continue to shape the securities industry in the second half of 2016, following mega deals signed by top local players earlier.After the big merger deals of Daewoo Securities and Hyundai Securities earlier this year and last year, M&A activities in the industry are expected to pick up due to deteriorating balance sheets. “Brokerage houses will come under growing pressure to drive growth through M&As as their growth woe worsen

June 20, 2016

WeMade struggles to launch next big hit

WeMade Entertainment, once a dominant game developer and publisher, is facing a slowdown as it struggles to release a game that can be a hit at home and abroad. The KOSDAQ-listed gamer, which brought fans blockbuster games such as “Candy Pang” and “Wind Runner,” performed below expectations in the first half of this year, with its highly anticipated role-playing action game “Soul & Stone” flopping early this year.                                                      Wemade‘s “Wind Runner” (WeMad

June 20, 2016

Samsung Electronics adopts new appellation system

[THE INVESTOR] Samsung Electronics plans to transform its appellation system starting next month under the slogan “Start-up Samsung,” according to local reports on June 20. The initiative aims to get rid of designations and boost the atmosphere to share ideas freely among workers. The company is currently conducting a survey on employees regarding the new system. The survey provides four alternatives: adding “Nim” -- which refers to “sir” in Korea -- “pro” or “manager” at the end of a name, or u

June 20, 2016

Hallyu contents to be hit by tougher Chinese regulations

[THE INVESTOR] China has officially announced plans to strengthen regulations on imports of overseas contents, according to China Daily on June 20.The directive issued by the State Administrator of Press, Publication, Radio, Film and Television focuses on producing media embodying “Chinese spirit and value” starting July 1, and is expected to deal a blow to the spread of hallyu, or Korean Wave, contents that have been steadily gaining popularity in the country. Poster of KBS2 drama “Descendants

June 20, 2016

Hanwha begins shipping K9 hulls to Poland

[THE INVESTOR] Hanwha Techwin, Hanwha Group’s weapons and surveillance systems affiliate, announced on June 20 that it began shipping the hull of the K9 self-propelled gun to Poland. K9 self-propelled gun.Hanwha Techwin signed the contract to supply 120 units of K9’s hull to Poland’s state-run defense contractor HSW in December 2014. HSW will attach its own turret to the body to produce the AHS Krab 155-mm self-propelled gun. Six K9 hulls were shipped to Poland on June 20, Hanwha Techwin said. A

June 20, 2016

Corporate Korea lacks antitakeover measures

[THE INVESTOR] Only 1 percent of Korean companies have set up defense mechanisms against hostile takeovers in recent years, indicating that they are still vulnerable to such threats and shows the lack of corporate governance. Daeshin Economic Research Institute on June 19 looked into 600 listed companies and conglomerate affiliates in Korea where institutional investors or the pension fund hold more than 5 percent stake in the company. Only six of 600, or 1 percent, have established measures aga

June 20, 2016

Korea, Israel to develop amphibious drone, high-tech farming technology

[THE INVESTOR] Korea and Israel will collaborate in developing amphibious unmanned aerial vehicles, Korea’s Ministry of Trade, Industry and Energy announced on June 20. The project will be conducted by Korea’s KEVA Drone and Israel’s Aerodrome with the support of both governments through the Korea-Israel Industrial R&D Foundation.The two companies plan to develop light drones that can land on both land and water fitted with water-resistant imaging equipment. Founded in 2001, Korea-Israel Industr

June 20, 2016

Chinese operations expected to boost Hanmi Pharm

[THE INVESTOR] NH Investment and Securities maintained Hanmi Pharm’s target price at 1.1 million won (US$944) on June 20, saying that the pharma firm’s Chinese branch is expected to continue expanding. Hanmi Pharm opened at 660,000 won on the stock market June 20, up 10,000 won from June 17. According to NH Investment and Securities, Beijing Hanmi has recorded an average annual growth rate of 21.2 percent since 2006. Saying that Beijing Hanmi is expected to apply for clinical trials and licenses

June 20, 2016

Bad loans may put insurance firms at risk

[THE INVESTOR] Korean insurance companies’ financial status and profitability may take a blow following the industry-wide restructuring of shipbuilding and shipping sectors as corporate debts extended by insurers are on the rise, according to a local think tank’s report. “The size of corporate liabilities extended by insurance companies is only one-twelfth of banks’ lending but credit risks that they are taking can be relatively bigger,” said Jeon Yong-sik, a researcher at Korea Insurance Resear

June 20, 2016

Bank of China set to join Seoul's yuan futures market

The Seoul branch of the Bank of China, a major Chinese commercial bank, may soon begin offering futures contracts on the Seoul bourse, informed sources said Monday, a move that could help significantly boost the local market.The local branch of the Chinese bank has already submitted a request to South Korea's financial watchdog, seeking permission to sell futures contracts on the South Korean stock market, according to the market sources, who spoke on condition of anonymity.The state watchdog, F

June 20, 2016