Record-low interest rates leading to weak deposit rates of Korean banks

[THE INVESTOR] With the Bank of Korea reducing its policy rate to a record low of 1.5 percent, interest rates paid by local banks have dropped to zero percent, which could mean negative returns on bank deposits when adjusted for price inflation, according to market observers on June 15. According to the observers, Citibank Korea has cut the annual interest rate on its savings accounts for companies to 0.01 percent from 0.1 percent. A 0.01 percent interest rate submits 1,000 won ($0.85) per year

June 15, 2016

[ANALYST REPORT] Few benefits of company size redesignation

Strategy briefing• Korea’s Fair Trade Commission (FTC) last week announced new measures for the nation’s corporate designation system, with the key revision changing the definition of a “large” company from one with assets of KRW5t or more to KRW10t or more, which will likely affect 37 domestic firms (including 20 listed ones).• The amendments—except those governing profit-taking by majority stakeholders of chaebol (eg, from intra-group transactions) and select firms subject to obligatory disclo

June 15, 2016

LINE skips dividend payout

[THE INVESTOR] LINE Corp., the messaging app arm of South Korea’s popular web portal Naver, has not been paying dividends to its shareholders and Seoul headquarters, according to documents on June 15. According to documents recently submitted to Tokyo’s main bourse operator, the Japan Exchange Group Inc. and the U.S.-based Securities and Exchange Commission, LINE has never issued dividends since it was launched in 2000. On the issue, the company elaborated about its dividend plans in the submitt

June 15, 2016

S.Korea‘s economic output edged up 0.7 % in 2014

[THE INVESTOR] South Korea‘s economic output increased in 2014 from a year earlier, a central bank report showed Wednesday.But output by the manufacturing sector fell, along with the portion of trade in total supply also shrinking. Busan PortThe country’s total supply, which equals total consumption, came to 4,237.8 trillion won ($3,598.1 billion) in 2014, up 0.7 percent from the previous year, according to the Bank of Korea. The reading was a turnaround from a 0.2 percent on-year drop in the pr

June 15, 2016

Korea’s export prices fell 4% in May

[THE INVESTOR] South Korea’s export prices fell 4 percent in May to post a fifth straight month drop on-year,  according to central bank data on June 15. But compared to April, the prices gained 2.4 percent. The on-month increase was largely credited to the weakening of the local currency, which traded at an average 1,171.51 won against the dollar in May, 2.1 percent drop from an average 1,147.51 won in the previous month, according to the central bank. Export prices of industrial goods decrease

June 15, 2016