S.R. Kim orchestrated Korea Forum-Roadshows overseas,
representing Financial Supervisory Commission
(Chosun Ilbo, Oct. 20, 1998)

There has been a cautious but increasing optimism among foreign investors toward the prospect of the Korean economy in view of lowered US interest rates and strong yen value. On the strength of such tendency, the prices of the Korean Government Yankee bonds denominated in US dollars began to increase last week. Spread for the 10-year Korean Government bonds (JP Morgan quotes) was recorded at 6.14% on October 16 in New York, a 1.71% point decrease from the 7.85% of October 8, a week earlier. Spread for the Yankee bonds issued by the Korea Development Bank maturing in 2001 also saw a 1.25% point decrease to 8.5% on October 16 from 9.75% of October 9. Last week, Korea Stock Exchange also recorded a net increase of US$380 million in foreign investment with an average daily inflow of US$50 million from foreigners.

Institutional investors are rapidly entering the Korean market with Merrill Lynchs’ top strategist Charles Klosse increasing weights of Korea and Thailands, stating that he is shifting his funds toward these two markets. Klosse commented that the combination of falling interest rates and corporate restructuring through reduction of debt and the numbers of employees has been contributing to creating the most attractive investment appetites on the part of foreign investors toward Korea ahead of other Asian countries. It is a predominant opinion that government’s financial restructuring efforts are highly praised, which enables Korea to stand out among emerging markets still struggling with those restructuring. Director Joon-Ki Hong of Warburgh Dillon-Rhode pointed out that Korea has more successfully met the IMF requirements compared to the other emerging markets and that Western European financial institutions has been considering the upgrade of credit limits to Korean government.

In the Korea Forum-Roadshows held in Tokyo and other major cities of Asia, Europe and the United States over the last 3 weeks, it appears that overseas investors have taken keener interest in the Korean market. Suk-Jung Lim, Branch Manager of JP Morgan Korea, who organized the Roadshow with Soo-Ryong Kim (“S.R. Kim”), Advisor to the Chairman of Financial Supervisory Commission, stated that there was great interest among the 170 institutional investors who attended the Roadshow, unlike the cases with the Roadshows which were arranged by other Asian countries in the same period. He also emphasized that institutional investors were impressed by Korea’s financial and corporate restructuring efforts presented in the Roadshow. S.R. Kim, who represented the Financial Supervisory Commission at the Roadshow, asserted that the prospects for the Korean economy should improve significantly next year with stronger yen, stabilized Chinese economy and stabilized raw material costs. He also commented that the corporate restructuring should be completed expeditiously in order, to prevent Korean exports from downturning by unforeseeable exogenous factors next year.