State-run think tank expected to lower growth outlook

A major state-run think tank in South Korea will likely lower its growth projection for the country as worsening market situations at home and abroad are clouding the outlook for Asia's fourth-largest economy, sources said Friday.As the Korea Development Institute (KDI) is to announce its growth projection for South Korea in mid-May, sources close to the matter said that the think tank could lower its growth forecast to the 2 percent range for this year. In its December outlook, it revised down

May 6, 2016

Banks tighten loans to large firms on bad debt fears

Major commercial lenders in Korea are tightening standards on new loans for large conglomerates over fears of rising bad loans amid the ongoing corporate restructuring of ailing industries. Outstanding loans extended by Shinhan Bank, Kookmin Bank and three other major lenders to big companies reached 90.8 trillion won ($78 billion) as of end-April, down 4.8 trillion won from 95.6 trillion won a year earlier, according to industry data.  Lending section at a commercial bank branch in Seoul (Yonha

May 5, 2016

Stock market to brace for foreign selloffs

With international oil prices forecast to rise in the long-term and the effects of monetary easing waning in advanced economies, foreign investors are expected to soon become net-sellers of Korean stocks from net-buyers, according to the Korean Center for International Finance on Thursday. Several external risks are looming that will eventually lead foreign investors to offload their Korean stock holdings.The continued deadlock in talks on production between OPEC and non-OPEC oil producing econo

May 5, 2016

Korea’s household debt is manageable: IMF

Korea’s household debt has recently been increasing in tandem with rising mortgages on the back of relaxed regulations on borrowings and recovery in the housing market, the International Monetary Fund said.In its regional report assessing Korea’s household debt and housing market, the IMF noted that Korea’s high household debt does not pose a downside risk to the Korean economy, with financial authorities tightening their monitoring of nonbank loans and management of debtors’ repayment capabilit

May 5, 2016

Hanjin Shipping to begin creditor-led debt restructuring

Creditors of ailing Hanjin Shipping, the country’s largest shipper by capacity, have agreed to offer financial assistance to the company and initiate a corporate rehabilitation program with conditions attached. Seven creditor banks, led by state-run Korea Development Bank, gave a nod to Hanjin Shipping’s proposal to restructure its debt and provide an aid package in return for self-rescue efforts, at a meeting Wednesday. The conditions for bailout include a cut in charter rates that Hanjin pays

May 4, 2016

[Market Now] Niblo Barracks to be sold for W642b

Niblo Barracks, home to U.S. military personnel stationed in the Yongsan base, has been sold for 624.2 billion won ($540 million), Korea Land & Housing Corp. announced Wednesday. Daishin F&I, a local financial firm specializing in investment in distressed assets, is the buyer of the property which consists of more than 500 apartment units and 60,677 square meters of land, the state-run LH housing developer said.  Located in Hannam-dong, central Seoul, Niblo Barracks has been home to U.S. militar

May 4, 2016

[Market Now] SK Chemicals vice chairman sells stake in SK E&C

Chey Chang-won, vice chairman of SK Chemicals, has sold his entire stake in SK Engineering and Construction, the builder said Wednesday.SK E&C said in a regulatory filing that Chey sold off 156.9 million shares of the company, or 4.45 percent of all shares. The sale is worth 52 billion won ($45 million) given the share price of 33,000 won.SK Holdings is the largest shareholder of SK E&C with a 44.48 percent stake, followed by SK Chemicals with a 28.25 percent stake.Chey sold his shares in SK E&C

May 4, 2016

[Market Now] Doosan Bobcat issues new shares to improve finances

Korean construction machinery manufacturer Doosan Infracore said that its subsidiary Doosan Bobcat has decided to offer 1,354 new shares worth 617.2 billion won ($535 million) to affiliate Doosan Engine.The proceeds from share issuances will be used to improve Bobcat’s finances, Doosan Infracore said in a public disclosure.Doosan Bobcat, a construction equipment maker, is wholly owned subsidiary of Doosan Infracore. Doosan Heavy Industries & Construction, an infrastructure giant, is the biggest

May 4, 2016

Daewoo Shipbuilding woes dwarf shipping problems

Korea is moving to recapitalize the Korea Development Bank to help it lead debt structuring of distressed shipping lines and shipyards, but data shows a bigger problem may be brewing inside the policy bank’s own jurisdiction. KDB’s own shipbuilding subsidiary Daewoo Shipbuilding & Marine Engineering has liabilities 730 times larger than its equity capital as of Dec. 31, 2015. According to data compiled by data provider CEO Score, the world’s No. 2 shipyard that is 49.7 percent owned by KDB was a

May 4, 2016

Seoul shares down 0.49% ahead of holiday

Korean stocks closed lower Wednesday as investors sat on the sidelines ahead of the country's four-day holiday, analysts said. The local currency dropped against the U.S. dollar.The benchmark Korea Composite Stock Price Index (KOSPI) shed 9.7 points, or 0.49 percent, to 1,976.71. Trade volume came to 348.5 million shares worth 4.97 trillion won ($4.3 billion), with losers outpacing gainers 611 to 185.Analysts said Seoul shares lost ground as investors refrained from making purchases as the count

May 4, 2016

Ministry, BOK agree to increase capital base of policy banks

The Finance Ministry and the Bank of Korea have agreed to increase the capital base of policy banks through a mix of fiscal and monetary policies to ensure that corporate restructuring is carried out as planned, according to ministry officials Wednesday.In their first task force meeting presided over by Vice Finance Minister Choi Sang-mok with officials from the central bank, the Financial Services Commission, the state-run Korea Development Bank and the Export-Import Bank of Korea, the Finance

May 4, 2016

Chinese auto parts maker to list in Korea

Chinese auto parts manufacturer Rothwell International is set to be listed on the Korean stock exchange next month. The company seeks to raise as much as 68.2 billion won ($59 million) through an initial public offering in Korea, according to a preliminary IPO prospectus.The firm, which will kick off a two-day bookbuilding session starting May 24, has set its price range at 2,400 won to 3,600 won per share for the upcoming IPO. It will give Rothwell a market capitalization of up to 280 billion w

May 4, 2016

Corporate restructuring to have little impact on banks: bank association chief

The chief of the Korean banks' association said on Wednesday that the ongoing industrial restructuring will have little impact on local commercial banks, citing their minor exposure to financially troubled companies. In a press conference held in Germany on the sidelines of the 49th Asia Development Bank annual meeting which ends on May 5 (local time), Korea Federation of Banks (KFB) Chairman Ha Yung-ku said, "In the past, commercial banks carried a bigger exposure ratio of 60 percent to compani

May 4, 2016

[Market Now] Tongyang fails to buy Sambu’s unit

Ready-mix concrete and other construction materials maker Tongyang Inc. said Wednesday that it has failed to acquire construction materials manufacturer Sambu Construction Industrial.The company said in a public filing that “the main bid to purchase shares of Sambu Construction Industrial failed.”Sambu Construction Industrial is 99 percent owned by Sambu Construction Co., which is currently under court receivership. Earlier in March, Tongyang had submitted a letter of intent to take over Sambu C

May 4, 2016

Korea's foreign exchange reserves gain $2.64 bln in April

Korea's foreign exchange reserves continued to increase in April on a rise in overseas securities and deposits, the central bank said Wednesday.As of the end of last month, the country's foreign exchange reserves came to $372.48 billion, up $2.64 billion from the previous month, according to the Bank of Korea (BOK). Bank of Korea (Yonhap)April marked the second consecutive month the country posted on-month growth in its foreign exchange reserves, following four consecutive months of decline.Fore

May 4, 2016

[Market Now] Cosmetic shares rise on solid earnings

Shares of cosmetics firms started off strong Wednesday morning as investors seemed to have shown confidence in their solid first-quarter earnings, an analyst said.Korea’s top cosmetics-maker AmorePacific Corp. rose 1.56 percent to trade at 422,500 won ($366) as of 10:12 a.m. The nation’s No. 2 producer of beauty products LG Household & Health Care gained 1.07 percent to 1,037,000 won as of 10:14 a.m.“First quarter earnings were good in the cosmetics industry. Cosmetics firms are expected to cont

May 4, 2016

Korean shares open weaker on cars, steels

Korean stocks started weaker Wednesday following losses from carmakers and steelmakers.The benchmark Korea Composite Stock Price Index (KOSPI) shed 7.06 points, or 0.36 percent, to 1,979.35 in the first 15 minutes of trading.Carmakers kicked off bearish, with No. 1 Hyundai Motor falling 1.05 percent and its sister Kia Motors moving down 0.95 percent. Top auto parts maker Hyundai Mobis shed 0.58 percent.Leading steelmaker POSCO shed 1.96 percent and Hyundai Steel moved down 2.3 percent. Korea Zin

May 4, 2016

Coway’s net profit rises in first quarter

Korea’s water purifier maker and distributer Coway Co. said its net profit jumped 22.7 percent to mark 95.2 billion won ($83.6 million) in the first quarter from a year earlier.In a public filing, the company said its sales rose 13.8 percent to 623.6 billion won and operating profit increased 23.2 percent to 123.5 billion won in the first quarter year-on-year.Local private equity MBK Partners, which owns 30.9 percent stake in Coway, put the company up for sale in August last year and selected Go

May 3, 2016

NongHyup to take ‘big bath’ provisions

NongHyup Bank will set aside more funds for loans that may turn sour in the next two years, in a preemptive measure to improve asset quality, the head of its parent NH Financial Group said Tuesday. NH Bank, as it is known, was a major drag on the group’s balance sheet in the first quarter of this year, reporting net profits 65 percent lower from a year earlier on a sharp increase in its loan-loss provisions.  NH Financial Group chairman Kim Yong-hwan speaks during a press conference in Seoul on

May 3, 2016

Seoul shares up 0.4% on eased risk-averse mood

Korean stocks closed marginally higher Tuesday on eased risk-averse sentiment. The local currency dropped against the U.S. dollar.The benchmark Korea Composite Stock Price Index (KOSPI) gained 8.26 points, or 0.42 percent, to 1,986.41. Trade volume came to 306.4 million shares worth 3.7 trillion won ($3.2 billion), with gainers outnumbering losers 502 to 287.The KOSPI opened higher following the overnight uptrend in Wall Street, but its gains were limited on a cautious note ahead of the four-day

May 3, 2016