[Newsmaker] KDB burdened by corporate debt restructuring

State-owned Korea Development Bank was founded in 1954 with a specific goal and role -- to back the government’s industrial policies by providing necessary capital to help companies innovate, grow and most importantly, create jobs.But 62 years later, with a plethora of companies failing to meet their debt obligations and facing inevitable restructuring through asset sales and job cuts, the policy bank has now turned into a “fireman” who will have to put out the fire caused by corporate mismanage

April 27, 2016

ING Life Korea sale process begins

The sale process for ING Life Korea has commenced, according to industry sources Wednesday.Asian buyout firm MBK Partners plans to sell its stake in the South Korea’s fifth-largest insurance company by assets in a deal estimated at $3 billion. MBK, which bought ING Life Korea in 2013 from ING Group at $1.7 billion, kicked off the sale process by sending out financial information to potential bidders. Morgan Stanley is the main manager of the deal. More than a dozen potential bidders including Ko

April 27, 2016

MSCI’s inclusion of Chinese shares won’t affect Korea: analyst

MSCI’s likely inclusion of Chinese mainland-listed shares in its main emerging index will have limited impact on the Korean stock market in terms of foreign capital exodus, an analyst said Wednesday.In early June, the index provider is scheduled to make a decision on including 5 percent of China’s A-shares in its emerging equity benchmark, after discussions with investors, MSCI said earlier in March.The inclusion could bring a bigger proportion of global capital into Chinese shares from passive

April 27, 2016

Korean shares open lower ahead of FOMC meeting

Korean stocks opened lower Wednesday as investors digested mixed earnings reports, awaiting the rate decision from U.S. Federal Reserve's policy meeting.The benchmark Korea Composite Stock Price Index (KOSPI) shed 1.01 point, or 0.05 percent, to 2,018.62 in the first 15 minutes of trading. Federal Reserve officials started a two-day policy meeting in Washington, D.C., and are set to announce the rate decision late Wednesday (local time). Top market cap Samsung Electronics edged down 0.46 percent

April 27, 2016

Creditors want Hanjin Shipping to bear more pain

Debt-ridden container carrier Hanjin Shipping plans to raise a total of 411.2 billion won ($357 million) through asset sales, but its main creditor Korea Development Bank says that is not enough for it to secure an aid package. KDB demanded that Hanjin, part of the group of the same name that also controls Korean Air, supplement its application for debt restructuring, filed Monday to the state-run bank, with an additional and more detailed plan of self-rescue.  Hanjin Shipping`s head office in S

April 26, 2016

Seoul stocks close higher on tech, shipbuilding gains

Korean stocks finished higher Tuesday on gains in tech and shipbuilding shares. The benchmark Korea Composite Stock Price Index rose 5.08 points, or 0.25 percent, to 2,019.63. Trade volume stood at 5.02 million shares worth 5.11 trillion won ($4.44 billion), with losers beating gainers 491 to 316. KOSPI share prices are displayed at the Korea Exchange. (Yonhap)Samsung Electronics rose 1.17 percent to 1,296,000 won following rosier outlooks for its first-quarter earnings. The share price of world

April 26, 2016

[Market Now] KAI’s operating profit surges 44 percent

The nation’s lone aircraft-maker Korea Aerospace Industries said its operating profit surged 43.8 percent year-on-year to 81.2 billion won ($70.5 million) in the first quarter of 2016.In a public filing, the company said its revenue rose 14.4 percent to mark 710.5 billion won and net profit jumped 72.7 percent year-on-year in the same period. Manufacturing line at KAI (Yonhap)KAI’s shares rose 0.73 percent to close at 69,200 won Tuesday.Meanwhile, the state-run Korea Development Bank, the larges

April 26, 2016

Seoul shares end higher on tech gains

Korean stocks closed higher on Tuesday as investors snapped up major tech shares, helped by shipbuilders rebounding from deep losses on hopes for restructuring measures. The local currency weakened against the U.S. dollar.The benchmark Korea Composite Stock Price Index (KOSPI) added 5.08 points, or 0.25 percent, to 2,019.63. Trade volume was moderate at 5.02 million shares worth 5.11 trillion won ($4.44 billion), with losers beating gainers 491 to 316.Analysts said the local index was undergoing

April 26, 2016

Gov't to intensify clampdown on illegal lending

The government said Tuesday that it will launch a massive crackdown on illegal private lending and other crimes that threaten the livelihoods and safety of ordinary people.The crackdown is part of a government drive to root out loan sharks amid concerns that such illegal acts are undermining the government's efforts to maintain a firm cap on the maximum loan interest rate currently set at 27.9 percent, down from 34.9 percent in the past. Prime Minister Hwang Kyo-ahn (Yonhap)Under the plan, the g

April 26, 2016

Massive restructuring of shipping, shipbuilders in the offing

A slew of companies ranging from shipping, shipbuilding to petrochemicals and steel -- once Korea’s growth engines -- exposed to financial risks stemming from downturns and bad debts are about to face rigorous restructuring spearheaded by the top financial regulator.The Financial Services Commission said Tuesday that it will carry out the so-called “three-track” system of corporate restructuring. Under the scheme, the regulator in collaboration with other state agencies and creditor banks will i

April 26, 2016

China risk to global economy likely to grow: IMF

China’s spillovers that trigger financial asset price movement in global markets will grow with more tightened direct financial linkages among global economies and concerns about the country’s weaker growth and import demand, an official at the International Monetary Fund said Tuesday.  “Spillovers of emerging market shocks to equity prices and exchange rates in advanced and emerging market economies have risen substantially and now explain over a third of the variation in asset returns in these

April 26, 2016

Samsung Fire & Marine Insurance receives highest credit rating

The nation’s top nonlife insurer Samsung Fire & Marine Insurance said Tuesday that it received the highest credit rating of A++ from A.M. Best, a global insurance rating agency, for the fifth consecutive year in 2015. “The rating affirmations reflect Samsung Fire & Marine’s excellent risk-adjusted capitalization, strong operating performance and superior business profile,” A.M. Best said in a statement. Samsung Fire & Marine Insurance's headquarters in central Seoul.Local insurers are bracing fo

April 26, 2016

[Market Now] Shipbuilders rebound on government’s restructuring plan

Share prices of South Korean shipbuilders rebounded Tuesday on the government’s announcement of restructuring plans.The nation’s top shipbuilder Hyundai Heavy Industries rose 3.21 percent to close at 112,550 won ($97.90) on the main Seoul bourse, following a 6.03 percent decline on the previous day.Samsung Heavy Industries rose 0.93 percent to 10,800 won after a 6.96 percent fall on Monday. Daewoo Shipbuilding and Marine Engineering picked up 1.38 percent to 5,150 won on Tuesday after a 4.15 dro

April 26, 2016

Seoul equities open lower on financial losses

South Korean share prices opened in negative territory Tuesday on losses in financial shares. The benchmark Korea Composite Stock Price Index edged down 0.9 point, or 0.04 percent, to 2,013.75, during the first 15 minutes of trading.  (Yonhap)Financials were hit by pressure from the government to lead corporate restructuring efforts on faltering sectors, such as shipbuilding and construction. Shinhan Financial Group retreated 2.84 percent, and KB Financial Group lost 1.64 percent. Tech shares we

April 26, 2016

Fate of Hanjin Shipping in hands of creditors

The fate of Korea’s two largest container carriers, which handle the bulk of Korea’s exports, now rests in the hands of creditors, after years of overcapacity and slowing trade globally led to a free fall in shipping prices.　Hanjin Shipping, the nation’s No. 1 carrier by capacity, on Monday officially filed for creditor-led rehabilitation, becoming the second major shipping line to succumb to a mountain of debt this year. 　Along with the application for debt restructuring, the firm submitted a w

April 25, 2016

Paradigm shift of financial consumer protection

“I just signed the contract because the salesperson told me that the financial product is safe so that I don’t need to take the risk of losing money. The salesperson didn’t give me an explanation about the possibility of loss.”“The life planner explained that the product covers every relevant disease, so I decided to buy it. And the planner said, I just need to say yes to every question a telemarketer asks. So I did, but I never expected this situation.”Kim Soo-ilThese are consumer complaints wh

April 25, 2016

[KOSDAQ Star] Loen to achieve solid growth this year: analysts

This is the eighth in a series of articles analyzing major companies by market capitalization traded on the tech-heavy KOSDAQ market. -- Ed.Loen Entertainment, operator of Korea’s top online music streaming service MelOn, is likely to achieve solid growth this year on the benefits from its tie-up with Kakao Corp., analysts said Monday. As of the end of March -- just two months since Kakao acquired a major stake in Loen -- MelOn had up to 3.65 million paid subscribers after adding 100,000 new sub

April 25, 2016

[Market Now] Hanjin Shipping tanks; Hanjin KAL soars

Shares of Hanjin Group’s key companies moved in opposite directions Monday, as investors gauged the expected impact of its shipping affiliate’s pursuit of a creditor-led rehabilitation. Hanjin Shipping tanked on the main Seoul bourse, with its stocks closing at 1,825 won ($1.60) per share, 29.94 percent lower than the previous close. Hanjin KAL, the group’s holdings firm, soared 8.42 percent to 20,600 won, while Korean Air Lines declined 2.3 percent to 29,750 won. Hanjin Shipping, the country’s

April 25, 2016

Seoul shares end tad lower on shipbuilder losses

Korean stocks closed slightly lower Monday as investors sold shipbuilders and shipping companies on their grim business outlook. The local currency lost against the U.S. dollar.The benchmark Korea Composite Stock Price Index (KOSPI) ticked down 0.94 point, or 0.05 percent, to 2,014.55. Trade volume was moderate at 392.71 million shares worth 4.31 trillion won ($3.75 billion), with decliners outnumbering advancers 472 to 334.Institutions offloaded companies in the heavy industry sector as they ar

April 25, 2016

Policy banks cautioned on increased corporate lending

Korea’s state-run policy banks have been questioned on whether they can withstand potential debt fallout from companies facing marginal or weak profitability, with lenders’ capital buffering capability falling on increased loans to financially instable conglomerates.A report by the Korea Development Institute showed that the country’s two main policy lenders – Korea Development Bank and the Korea Export-Import Bank – extended loans worth 82 trillion won ($70 billion) two years ago, up from 34 tr

April 25, 2016