Seoul stocks open higher on eased Brexit worries

South Korean shares opened higher Monday on eased Brexit concerns following the killing of a British politician who objected to Britain's exit from the European Union. Polls conducted after last week's murder of Labor politician Jo Cox, a fervent supporter of Britain remaining in the EU, show the "Stay" camp is now slightly ahead of the "Leave" camp in a reveral of their earlier positions. The benchmark Korea Composite Stock Price Index advanced 18.15 points, or 0.87 percent, to 1,970.38 in the

June 20, 2016

FSC to approve Bank of China’s participation in yuan-based derivatives market

[THE INVESTOR] The Bank of China, one of China’s four major state-owned banks, has decided to participate in yuan futures market launched by the Korea Exchange last year, sources said June 20. Financial Services Commission, Korea’s top financial regulator, is expected to give a preliminary approval to the Seoul branch of BOC soon as the bank applied for operation license to trade yuan-based derivatives products here in March. Once the Chinese bank receives the green light, the Korean authority w

June 20, 2016

Antigraft act will cause US$10b loss per year: think tank

[THE INVESTOR] The new anticorruption act set to take effect in September will cost local businesses 11.6 trillion won (US$9.96 billion) on an annual basis, a think tank claimed.Commonly known as the Kim Young-ran act, it will place a ceiling on the value of gifts -- cash and goods -- and meals individuals in selected professions can have in their professional capacities. The government announced its enforcement in May. According to a report compiled by the Korea Economic Research Institute, if

June 20, 2016

Seoul shares open higher on eased Brexit fears

[THE INVESTOR] South Korean shares opened higher on June 20 due to eased Brexit concerns following the murder of a British politician who was in favor of remaining in the European Union.Polls conducted after her murder last week show that more citizens now favor staying in the EU rather than leaving, a contrast from earlier. The benchmark Korea Composite Stock Price Index soared 18.15 points, or 0.87 percent, to 1,970.38 during the first 15 minutes of trading. Most large cap stocks traded higher

June 20, 2016

Tax-to-GDP ratio rises on increased taxpayers

[THE INVESTOR] The nation’s ratio of income tax revenue to gross domestic product has been rising at a fast pace in recent years largely due to the increasing number of taxpayers, data showed on June 20. The country’s revenue from earned income and global income tax came to 36.8 trillion won (US$31.4 billion) in 2014, accounting for 2.48 percent of the overall tax revenue of 1,485.1 trillion won, according to the report based on data from the Finance Ministry and the National Tax Service.Earned

June 20, 2016

Expectations for extra budget grow

[THE INVESTOR] With the government seen leaning toward compiling a supplementary budget, attention is now being drawn to the size of the possible fiscal boost. Experts said the government has room for a “sizable” extra budget of more than 10 trillion won, given that this year’s tax collection was running 23 percent higher than the year before.  “The government will actively reinforce fiscal measures in the second half of the year,” Finance Minister Yoo Il-ho said Friday, predicting a tougher tim

June 19, 2016

Korean banks’ short-term foreign liabilities exceed W40tr

[THE INVESTOR] The net short-term foreign liabilities of major South Korean lenders have exceeded 40 trillion won (US$34.09 billion), raising concerns about the banks’ foreign currency soundness. According to analyst estimates, the combined foreign liabilities of the country’s six major banks that will mature in less than two years stood at 37.11 trillion won as of last week. The total owed by all local lenders currently stands well above 40 trillion won, considering the additional 2.9 trillion

June 19, 2016

Seoul shares to await Britain's referendum next week

South Korean shares are expected to be swayed by the result of Britain's referendum on its European Union membership as the historic vote will determine the overall sentiment in the global financial market, analysts said Saturday.The benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,953.4 points on Friday, losing 3.18 percent from a week ago.It was the biggest weekly loss since mid-February.The index slipped five consecutive days and slightly rose on Friday on bargain hunting as in

June 18, 2016

[FEATURE] Money doesn’t come easy

[THE INVESTOR] There is a saying, “Money does not grow on trees.” One has to work really hard to earn it.But making an honest buck in this age of low interest rates and low growth has become harder than ever.It is not as if Koreans do not work hard. In fact, Koreans work the longest hours after Mexicans among member countries of the Organization for Economic Cooperation and Development. Koreans worked 2,124 hours in 2014, according to the latest data. Working long hours does not necessarily mean

June 18, 2016

South Korean share prices rebound on eased Brexit woes

[THE INVESTOR] South Korean stocks snapped a six-day fall to close higher on June 17 on eased concerns over a British exit from the European Union. However, the rebound was still shaky amid lingering uncertainties in the global economy. The Korean won fell against the U.S. dollar.The benchmark Korea Composite Stock Price Index edged up 1.41 points, or 0.07 percent, to close at 1,953.4. Trade volume was at 478.81 million shares worth 4.42 trillion won (US$3.78 billion), with winners outnumbering

June 17, 2016

Stocks, bonds offer investment options amid low interest rates

[THE INVESTOR] With the central bank slashing its benchmark interest rate to a historic low of 1.25 percent, putting money in bank accounts will not increase people’s income, as bank deposit rates will drop in line with the key base rate.Experts recommend reallocating funds in bank deposits to other assets that offer higher yields. Real estate may be an option, but not a lot of people can afford to invest in an apartment unless they borrow money from banks with low interest rates. Investing fund

June 17, 2016

Bank deposits offer poor returns

[THE INVESTOR] Following the Bank of Korea’s surprise cut in base interest rate last week, local banks have each been slashing their own rates for deposit and saving accounts. Citibank Korea’s easy-access deposit account for corporate clients has fallen into negative return territory after the bank slashed its annual interest rate to 0.001 percent from 0.1 percent on Tuesday. This means that a deposit of 10 million won ($8527) earns 1,000 won a year in interest, or 846 won after tax. Given that

June 17, 2016

[INTERVIEW] 'Mom, buy me stock'

[THE INVESTOR] Whenever John Lee has the chance to meet new people he emphasizes the same piece of advice: “Buy your children stocks, instead of paying high fees for private education.”During our interview at his office in Bukchon, northern Seoul, the CEO of Meritz Asset Management asked me directly if I was investing in stocks. For ordinary Korean workers, it is not easy to check the stock market frequently and pick good shares that will yield high returns. When news reports tell us the local s

June 17, 2016

[ANALYST REPORT] LG Electronics: MC division to again disappoint

Rather than a demand rebound, LG Electronics (LGE) earnings are to continue being buoyed by its competitiveness in the home entertainment and home appliances markets (absence of rivals strong enough to supplant its positions in these markets). However, we expect earnings at its MC division to remain weak.2Q16 preview: MC division to book disappointing earnings We expect LGE to register 2Q16 sales of W14.4tn (up 3% y-y, up 8% q-q) and operating profit of W608.0bn (up 149% y-y, up 20% q-q) on weak

June 17, 2016

[ANALYST REPORT] The global robot revolution is here, and growing

The past month has seen a spate of robotics M&A activity around the world. China tipped its hand to its RIoT ambitions with a USD5bn offer for Germany’s Kuka, one of the world’s leading robotics companies. Kuka has traditionally been a strong player in the industrial robot space but recently has been aggressively moving into the service robotics domain due to the expected massive growth of the segment.Toyota is also reported to be in talks with Google to acquire Boston Dynamics and Schaft—the wo

June 17, 2016

Hanwha Defense eyes global armored vehicle market

Eurosatory defense exposition.[THE INVESTOR] Hanwha Defense Systems announced on June 17 that it has signed a 7.5 million euro (US$ 8.4 million) gun turret supply deal with CMI Defence at the Eurosatory defense exposition. CMI Defence is a Belgium based military equipment maker that specializes in weapons systems for armored vehicles.Under the contract, Hanwha will be supplied with 105 mm gun turret, which will then be used in building light infantry fighting vehicle based on the K21. The K21-ba

June 17, 2016

[Weekender] Bank deposits offer poor returns

Following the Bank of Korea’s surprise cut in base interest rate last week, local banks have each been slashing their own rates on deposit and saving accounts. Citibank Korea’s easy-access deposit account for corporate clients has fallen to the negative return territory after the bank slashed its annual interest rate to 0.001 percent from 0.1 percent on Tuesday. This means that a deposit of 10 million won ($8527) earns 1,000 won a year in interest or 846 won after tax. Given that inflation has r

June 17, 2016