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

Prosecutors search for evidence against agro body chief

[THE INVESTOR] The prosecution raided the office and home of National Agricultural Cooperative Federation chairman Kim Byeong-won on June 17 on suspicion of illegal activities during the election campaign. The NACF is Korea’s largest agroindustry body that counts NongHyup Financial Group among its affiliates. Its chairman is elected among chiefs of regional branches who run for office.NACF chairman Kim Byeong-won.The prosecution suspects that Kim took part in illegal campaign activities during t

June 17, 2016

Korea Development Bank may face parliamentary hearing

[THE INVESTOR] The Korea Development Bank is facing increasing heat over its part in the Daewoo Shipbuilding and Marine Engineering crisis. Following the damning reports from the Board of Audit and Inspection, the KDB has come under fire for allowing the shipbuilder to reach critical conditions unchecked. As more of its malpractice comes to light, the possibility of a parliamentary hearing on the state-run policy bank has surfaced. On June 17, Rep. Kim Jong-in, the interim leader of the main opp

June 17, 2016

Banks to benefit from LCR rules: experts

[THE INVESTOR] The latest financial regulations released by the government in efforts to secure foreign currency stability met with mostly positive responses from industry watchers.Regarding one of the key features requiring banks to raise their foreign exchange liquidity coverage ratio for banks, experts said the move would eventually lead to reinforcing the health of the banking sector. As a part of the stability plans, financial regulators said local banks will be required to raise their FX L

June 16, 2016

State auditor uncovers gross malpractice of KDB officials

[THE INVESTOR] State-run Korea Development Bank officials used debtor companies’ funds for housing, vehicles and entertainment, audit results showed on June 15.According to the Board of Audit and Inspection, KBD officials dispatched to oversee management of companies undergoing restructuring used the companies’ funds for unnecessary conveniences and entertainment.The audit showed that 16 KDB staff received housing from seven companies they were sent to oversee, while 36 bank officials used vehic

June 15, 2016

EXIM Bank poured 1.8 trillion won into ailing ship maker

[THE INVESTOR] The Export-Import Bank of Korea poured 1.8 trillion won ($1.5 billion) into an ailing shipbuilder for six years without keeping proper tabs on it, the Board of Audit and Inspection said on June 15. According to the BAI, the EXIM Bank neglected its duty in monitoring Sungdong Shipbuilding and Marine Engineering Co., 70.71 percent of whose shares are held by the bank. The shipbuilder has been under creditor-led restructuring since 2011. In laying out the recovery plans, the shipbuil

June 15, 2016

KDB’s neglect fueled Daewoo Shipbuilding crisis

[THE INVESTOR] Daewoo Shipbuilding and Marine Engineering’s current difficulties were fueled by neglect by its biggest shareholder Korea Development Bank, the Board of Audit and Inspection announced on June 15. According to the BAI, the state-run bank neglected its duty in monitoring the shipbuilder’s accounts and financial stability. The KDB holds 49.7 percent of DSME, making it the biggest shareholder as well as the shipbuilder’s main creditor.  Daewoo Shipbuilding and Marine Engineering.Accor

June 15, 2016

Lotte Card begins restructuring

[THE INVESTOR] Lotte Card has begun restructuring process, a local daily reported on June 14. The move comes while the authorities are turning up the heat on Lotte Group in an expanding corruption probe. Since June 10, the prosecutors’ office has been raiding Lotte Group offices and questioning officials over alleged embezzlement. According to the news report, Lotte Card launched a voluntary retirement scheme on June 14 in a move unusual for a Lotte firm. Employees above the age of 45 and those

June 14, 2016

Deutsche case leaves a lasting scar on Korea

[THE INVESTOR] On Nov. 11, 2010, with just 10 minutes for the stock market to close in Seoul, traders of Deutsche Bank dumped 2.4 trillion won ($2.05 billion) worth of Korean shares, triggering a 2.7 percent drop on the country’s main KOSPI index. The massive and coordinated sell-off by Deutsche employees in Hong Kong and Seoul wiped out 28 trillion won in value from Korea’s equity market, but the German bank reaped a profit of 44.9 billion won through derivative positions it had built in advanc

June 13, 2016

[EXCLUSIVE] Korean prosecutors’ inaction stalls justice for ex-Deutsche traders accused of rigging

[THE INVESTOR] Key suspects in Korea’s biggest stock price manipulation case are living a not-so-secret life in Hong Kong and Australia, while Korean prosecutors have made hardly any efforts to bring them to justice, an investigation by The Korea Herald has found.The suspects are Derek Ong and Phillip Lonergan, two of the three former Deutsche Bank employees facing criminal charges in Korea in relation to a 2010 stock rout. Local authorities have failed to extradite the three -- nationals of the

June 13, 2016

[DECODED: Mirae Asset] What's next in line at Mirae Asset?

[THE INVESTOR] Attention is now focused on who chairman Park Hyeon-joo will name as his successor at Mirae Asset Financial Group. The founder, openly critical of Korea’s large family-owned conglomerate’ father-to-son transfer of throne, has on multiple occasions said he will not pass down the group’s control to his children. 　　Local media paid keen attention, however, when Park Ha-min, Park’s eldest daughter, joined Mirae Asset Global Investments in 2013 to learn the ins and outs of real estate

June 13, 2016

[DECODED: Mirae Asset] Park Hyeon-joo’s men 　

[THE INVESTOR] Park Hyeon-joo is recognized as the brains behind the launch of Mirae Asset, one of Korea’s first asset managers to launch mutual and real estate trust funds in the country. Park Hyeon-jooAs the founder and chairman of the firm, Park -- a graduate of Korea University in business administration -- worked his way up the corporate ladder in brokerages, and gained keen trading sensibility. But like any great entrepreneur who has changed the world, Park was not alone in his quest for f

June 13, 2016

[DECODED: Mirae Asset] A reality check on ‘Korean IB’ dream

[THE INVESTOR] Global investment banking giants lament that their glory days are over. But for many Koreans, investment banking is still finance’s final frontier, all the more fascinating because it seems way beyond their reach. Park Hyeon-joo, arguably the most successful financier born in Korea, eyes Korea‘s presence in the world of investment bankers, from which existing players have been retreating. He aims to grow his Mirae Asset Financial Group into Asia’s leading investment bank. “I have

June 13, 2016

[DECODED: Mirae Asset] Mirae Asset under pressure to reform corporate governance　

[THE INVESTOR] Park Hyeon-joo, the founder and chairman of Mirae Asset Financial Group, tells his fund managers and executives to think global, have a long term vision and always be the first mover in the market.  Those principles, however, don’t seem to apply to his own ownership of the group.      Mirae Asset is under increasing pressure to reform its corporate governance structure, the cost of which Park seems to think of as a potential drag on global expansion.  Experts say Mirae Asset will

June 13, 2016

[DECODED: Mirae Asset] The dichotomy of Park Hyeon-joo

[THE INVESTOR] On the Monday after Christmas, Park Hyeon-joo took to the podium at the just-opened Four Seasons Hotel in Seoul, giving his first press conference in eight years. Mirae Asset Financial Group, which he founded in 1997 with 10 billion won ($8.4 million), had just won the hotly contested race to acquire control of KDB Daewoo Securities, a much bigger rival with a long proud legacy but a checkered recent history.  With the 2.4 trillion-won buy, Park’s biggest bet so far, the man who w

June 13, 2016

Lotte in crisis as probe widens

[THE INVESTOR] South Korean retail giant Lotte Group is facing its worst management crisis to date as the prosecution expands its probe on the group and its seven affiliates over allegations of embezzlement and the creation of a multibillion won slush fund.More than 200 investigators from the Seoul Central Prosecutor’s office raided 17 Lotte offices Friday morning, including the group headquarters in central Seoul and the residence of Lotte Group chairman Shin Dong-bin and key executives.Lee San

June 12, 2016

Korea’s asset management firms eye global markets

South Korean asset management companies are increasingly eyeing global markets to seek higher returns, as local capital markets face low interest rates, industry officials said Thursday.The number of overseas offices operated by Korean asset management companies more than doubled to 35 as of the end of 2015 from 14 in 2008, according to data by the Korea Financial Investment Association.The head office of the Korea Financial Investment Association in Seoul. (KOFIA)Among 35, 14 are run by Mirae A

June 2, 2016

NPS to expand investment in private equities in Asia

Korea’s largest institutional investor National Pension Service said it will increase the proportion of overseas investment in private equities in the Asian region to around 30 percent in its long term strategy.Out of the 512 trillion won ($429 billion) pension fund, 19.5 trillion won is allocated as global private equity investment, according to Yang Young-sig, the head of global private market at the investment division of the National Pension Service.National Pension Service (Yonhap)“NPS aims

June 1, 2016