from Financial Regulatory Forum:

S.Korea considers FX margin trading curbs -official

July 8, 2009

A South Korean bank clerk shows new 5,000-won ($4.93) bank notes at the headquarters of Woori Bank in Seoul    By Kim Yeon-hee and Lee Chang-ho
   SEOUL, July 8 (Reuters) - South Korea is considering imposing limits on currency margin trading to curb speculation, a senior official of the country's financial authority said on Wednesday, a move that may dent brokerage houses' efforts to expand into forex services.
   Margin trading allows investors to make leveraged bets on currencies and has grown increasingly popular in recent years among retail investors in South Korea and Japan.
   "We are considering a number of measures and will make an announcement soon," the official told Reuters, asking not to be identified until a decision was made.
   Steps to be taken could include raising the amount of collateral investors must park with margin brokers from the current 2 percent.
   Margin trades involve leverage of around 100 times or more than the amount of collateral, leaving the forex market more speculative and exposed to deep swings.
   Currently, about 20 currencies are traded via margin trading in South Korea, with the yen <JPY=> and euro <EUR=> the most popular.
   In April, the Nikkei business daily reported that Japan's Financial Services Agency was looking at limiting the maximum amount of leverage investors can employ for currency margin trading.
   Officials of futures trading firms are concerned about the upcoming curbs, saying they would limit their trading activity.
   But Chung Hae-geun, an executive managing director of Daewoo Securities, said the possible rules would bring forex margin trading into the regulatory boundary and help protect investors.
   South Korean brokerage companies, including Daewoo Securities <006800.KS> and Mirae Asset Securities <037620.KS>, have applied for licenses to offer forex margin and other futures trading, under a new capital markets law introduced in February.
   The won currency <KRW=> trimmed losses to close domestic trade at 1,273.50 against the dollar.
 (Additional reporting by Lee Soo-jung and Shin Jieun; Editing by Chris Lewis)
  ((yeonhee.kim@thomsonreuters.com; +82 2 3704 5646; Reuters Messaging: yeonhee.kim.reuters.com@reuters.net))
  ((If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com))
Keywords: KOREA FOREX/MEASURES 
   
Wednesday, 08 July 2009 08:29:26RTRS [nSEO103521] {C}ENDS

from Financial Regulatory Forum:

South Korea says to toughen home-backed lending

July 6, 2009

   SEOUL, July 6 (Reuters) - South Korea will toughen mortgage lending by broadening tight loan ceilings to the whole of Seoul and surrounding cities from Tuesday, a regulator said on Monday, amid signs of possible asset price bubbles.
   The move by the Financial Supervisory Service (FSS) follows a survey by the Bank of Korea, which showed South Korean banks were more willing to expand lending to companies and households in the current quarter on expectations for an improving business environment. [ID:nSEO325874]
   "With a surge in home-backed loans raising concern about a possible deterioration in the debt-servicing abilities of households and instability in the financial system, the Financial Supervisory Service called on banks to strengthen risk management against rising home-backed loans," the regulatory agency said in a statement.
   Under the guidance, banks will be required to cut the ceiling to 50 percent of the market price of a home worth 600 million won ($472,800) or more, from 60 percent at present, starting from new loans provided from Tuesday onwards.
   Currently, the rule limiting mortgage loans on the basis of loan-to-value ratios is applied to three areas in Seoul where speculative trade has caused a spike in housing prices.
   The decision comes after the country's policymakers cautioned against increased liquidity in financial markets after a string of interest rate cuts and government stimulus spending, which sparked speculation of an interest rate increase.
   Financial regulators have tried to stem rising home-backed loans, which increased by a net 3 trillion won per month from January through May.
   South Korea's housing prices in June rose for a third consecutive month, data showed last week. [ID:nSEO144812]
 ($1=1269.0 Won)

from Financial Regulatory Forum:

S.Korea scrutinises bank M&A financing practices

July 2, 2009

Daewoo Centre Building, former Daewoo Group headquarters, which is being remodeled by Daewoo Engineering & Construction, is seen in Seoul June 29, 2009. South Korea's Kumho Asiana Group said it had decided to put Daewoo Engineering & Construction up for a sale to ease investors worries about its liquidity.   REUTERS/Lee Jae-Won (SOUTH KOREA BUSINESS)    SEOUL, July 2 (Reuters) - South Korea has started looking into banks' practice of participating in mergers and acquisitions deals as financial investors, an official said on Thursday, signalling a possible measure to limit M&A financing.
   The move comes as South Korea's Kumho Asiana Group faces liquidity problems after buying Daewoo Engineering & Construction <047040.KS> together with financial sponsors for 6.4 trillion won ($5 billion) in 2006.
   With the December deadline to buy back Daewoo shares from financial investors in a "put-back option" looming, Kumho on Sunday announced a plan to sell the country's No.3 builder. [ID:nSEO340774]
   "Put-back options could hurt the buyers' balance sheets, and in turn hurt their creditor banks, too," said an official of the Financial Services Commission (FSC), the financial watchdog. The official asked not to be named before thw watchdog completes its scrutiny.
   "We are looking into the matter from a broader perspective: how to monitor companies' asset quality before they worsen and how to get creditor banks to notice risk factors in M&A deals."
   Kumho had provided the right to financial investors, including Mirae Asset and domestic banks, to sell back Daewoo shares at 31,500 won per share around the end of this year. The price is more than double Thursday's closing price of 12,850 won.
   FSC Chairman Chin Dong-soo said in parliament on Wednesday that "put-back options" could cause problems, and the watchdog would review the issue.
   The FSC official said measures the government agency was considering included raising banks' voice in the activities of large business groups as creditors, which has weakened since conglomerates increased bond sales for fund-raising about a decade ago. ($1=1267.4 Won)

from Tales from the Trail:

The First Draft: Obama recipe – take crisis-filled agenda, add one Iran

June 16, 2009

There is a new crisis on the agenda for President Barack Obama.

While trying to revitalize a nosediving economy, rebuild the collapsing auto industry, rein in North Korea's unpredictable Kim Jong-il and overhaul the costly healthcare system, Obama now can ponder his response to an Iran reeling from a disputed election and the biggest street protests since the 1979 Islamic revolution.

from Global News Journal:

An Interview With South Korea’s Box Office Champ Director Bong Joon-ho

June 15, 2009

The South Korean director whose movie about a mutant river monster became the country's biggest box office hit has a new film on what might be an even more terrifying subject -- an maniacally obsessive mother.

from Raw Japan:

North Korea’s test of wills

May 28, 2009

Japan, perhaps the most nervous neighbor of unpredictable North Korea, is also the least able to overtly make its fears felt, after this week's nuclear test.

from DealZone:

Coke, eBay activity in Asia

April 23, 2009

CHINA-ECONOMY/PROPERTYIs it a sign of recovery that cross-Pacific deals are making a comeback? Certainly the mighty dollar makes overseas assets cheap, and foreign governments are probably more willing to create less friction on inflows with investment markets quiet.

from Global News Journal:

North Korean Revolutionary Tunes Sink to Bottom of the Sea

April 7, 2009

                                              By Jon Herskovitz

from Reuters Soccer Blog:

South Korea rejects North Korea poisoning claim

April 6, 2009

South Korea has rejected claims by North Korea that it poisoned its players before last week's 2010 World Cup qualifier in Seoul, as tensions mounted over the North's long-range rocket launch on Sunday.

from The Great Debate:

What Asia needs from the G20 meeting

March 31, 2009

stanchartJaspal Bindra is Chief Executive, Asia, for Standard Chartered Bank. The views expressed are his own.