South Korea’s credit default swap (CDS) premium is stabilizing after the recent surge. Experts, however, point out that it is too early to be optimistic with the KRW-USD exchange rate still fluctuating and South Korea still recording a trade deficit.On Dec. 1, the CDS premium of its five-year Foreig
The Korea Securities Depository (KSD) signed MOUs with Euroclear and Clearstream on Nov. 29 and Dec. 1 so that foreigners’ investment in South Korean government bonds can be made easier based on omnibus accounts. The system is scheduled to be put into operation in the first half of 2023, and then fo
The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com. -- Ed. Following two rounds of refinancing this year for Lotte REIT, W650bn of additional refinancing is scheduled for 1H23. Although a reduction in FFO looks unavoidable in the short term, the pace of
The National Pension Service (NPS) Investment Management announced on Nov. 29 that its return on asset management was negative 7.06 percent for the first three quarters of this year.National pension assets under its management decreased 68 trillion won from January to September. Its loss was 25.47 p
The Korea Financial Investment Association announced on Nov. 27 that the 91-day commercial paper (CP) rate rose 0.02 percentage point to 5.5 percent on Nov. 25 to reach a new high for the 45th consecutive day. The rate rose from 3.15 percent to 5.5 percent from Sept. 22 to Nov. 25. The current rate
Individual investors are increasing their bond investment with stock markets remaining uncertain. Samsung Securities announced on Nov. 23 that its individual customers’ online bond purchase totaled 2.3 trillion won from Jan. 1 to Nov. 11 whereas the 2021 total is about 200 billion won. “More than 55
The author is an analyst of NH Investment & Securities. He can be reached at pk.park@nhqv.co. -- Ed. In 2022, healthcare stocks have been performing sluggishly in the NY stock market, affected by drastic absorption of market liquidity since early-2022. Given that 10-yr discounted cash flow is the mo
The Financial Services Commission and the Financial Supervisory Service announced insurance deregulation plans on Nov. 20.According to the plans, each life or non-life insurance company can have a subsidiary handling a single product, such as pet insurance and driver insurance. In addition, speciali
Lotte Chemical plans to hold a board of directors meeting this week at the earliest to finalize a plan to increase capital. While a paid-in capital increase of at least one trillion won is likely, the company is expected to review other funding methods such as bond issuance and borrowing from financ
Democratic Party of Korea lawmaker Park Yong-jin asked the National Policy Committee of the National Assembly on Nov. 7 to help revise the Insurance Business Act. Ruling and opposition party lawmakers in the committee are discussing whether to handle the matter at their meeting scheduled for next we
The author is an analyst of KB Securities. She can be reached at hyejung.jung@kbfg.com. -- Ed. KEPCO stock surged 8.77% DoD on expectations of rate hike— On Nov 9, KEPCO stock surged 8.77% DoD to close at KRW18,600. We attribute the jump to expectations of a marked increase in electricity rates next
Shinhan Bank has successfully issued 360 billion won worth of kangaroo bonds (bonds denominated in Australian dollars).The bank announced on Nov. 9 that it has issued kangaroo bonds worth AUD400 million, which is AUD100 million more than the original target. Shinhan Bank increased the issuance volum
The Bank of Korea announced on Nov. 9 that foreigners’ stock and bond investments in South Korea showed a net inflow of US$2.77 billion last month. For reference, the net outflow was US$2.29 billion in September after a net inflow in August.Last month, the net inflow in stock investment was US$2.49
Major financial holding companies’ default risk is continuing to rise despite their record profits. This is because of borrowers’ default risks rising along with the central bank interest rate and market uncertainties triggered by Legoland and Heungkuk Life Insurance. Experts point out that this imp
FILA Holdings Corp., which operates the global sports brand, FILA, announced on Nov. 8 its reorganization of key global teams, heralding a shift in marketing and design leadership.The new structure aims to strengthen the company’s organizational capabilities in order to successfully execute its five
Heungkuk Life Insurance failed in US$500 million early bond redemption scheduled for Nov. 9. This is the first time since 2009 that a South Korean financial institution failed in an early redemption of foreign currency bonds.Investors’ concerns are increasing rapidly. The company attempted at US$300
The Korea Exchange announced on Nov. 2 that short selling in KOSPI totaled 94.1389 trillion won and that in KOSDAQ totaled 27.8206 trillion won from January to October this year. For reference, in 2021 as a whole, those were 72.012 trillion won and 24.9058 trillion won, respectively.The total short
The Korea Financial Investment Association announced on Nov. 1 that the total bond trading value was 354 trillion won last month, down 77 trillion won from the previous month and down 100 trillion won from a year ago.The trading value fell below 400 trillion won for the first time since January 2009
The credit default swap (CDS) premium of the five-year foreign exchange stabilization bond (FESB) issued by the South Korean government rose 4 basis points to 70 on Oct. 31, the highest since Nov. 14, 2017. The figure was 21 basis points on Jan. 3 this year and topped 50 on Sept. 23 before reaching
South Korean enterprises’ debts are increasing rapidly with their corporate bond market shrinking fast. Their repayment capabilities are deteriorating amid high interest rates, inflation and economic slowdown. The number of companies with an interest coverage ratio of less than 1 is likely to increa