INTRODUCTION TO KOREAN CAPITAL MARTKET

Transcription

1 INTRODUCTION TO KOREAN CAPITAL MARTKET Seungjeong Lee Korea Financial Investment Association

2 K O R E A C A P I T A L M A R K E T I. KOFIA Introduction II. Capital Market Over view C O N T E N T S III. Financial Investment Industr y Over view IV. Key Challenges

3 I. KOFIA Introduction WHAT IS KOFIA? KOFIA is a Trade Association & SRO, established in Feb. 2009, through the merger of 3 associations KSDA (est. 1953), AMAK (est. 1996), KFA (est. 1996) [as of Oct.31, 2015]

4 I. KOFIA Introduction KOFIA s ROLE : POLICY ADVOCACY DOMESTIC POLICY ADVOCACY ACTIVITIES Areas of Policy Proposal : Revising and streamlining relevant laws, promoting the deregulation of investment products, introducing tax benefits, resolving conflicts with other financial sectors, etc. INTERNATIONAL POLICY ADVOCACY ACTIVITIES KOFIA is actively involved in international organizations advocating appropriate regulatory initiatives and regulations to global regulators, such as FSB, IOSCO, and BCBS KOFIA is a member of : the International Council of Securities Associations (ICSA), the Asia Securities Forum (ASF), the International Forum for Investor Education (IFIE), the International Organization of Securities Commissions (IOSCO), the International Investment Funds Association (IIFA)

5 I. KOFIA Introduction KOFIA s ROLE : SELF REGULATION Setting regulations and best practices for fair business activities Reviewing standards agreements and advertisements Conducting inspections of members Registering and administering qualification exams for financial professionals Resolving disputes KOFIA is responsible for the registration & management of industry professionals Type of Certification Number of People Certified Fund Investment Advisor 126,872 Certified Securities Investment Advisor Certified Derivatives Investment Advisor Certified Investment Advisory Officer 14,570 Certified Investment Manager 13,336 Certified Research Analyst 1,116 Certified Financial Risk Manager 246 Credit Rating Agent 217 [as of Sep.5, 2016] Total 315,248

6 I. KOFIA Introduction KOFIA s ROLE : OTC MARKET OPERATION K-OTC Market A trading platform for unlisted companies who have either registered or been designated by KOFIA. Companies must submit annual reports or comply with the disclosure requirements set out by KOFIA K-OTCBB A trading platform which permits the transaction of all kinds of unlisted stocks, regardless of the company s compliance with disclosure requirements Market Established by KOFIA to Facilitate Trading of Unlisted Stocks OTC Bond Market In primary market, KOFIA oversees regulations on Underwriting Business, operates the QIB market, and collects report of corporate bond issue plan and underwriting contracts. In secondary market, KOFIA operates the FreeBond System, Bond Quotation System (BQS), and Bond-Trade Report & Information Service (B-TRiS).

7 I. KOFIA Introduction KOFIA s ROLE : PROFESSIONAL EDUCATION KOFIA fosters and trains industry professionals through the Korea Institute of Financial Investment (KIFIN). KIFIN offers a wide range of training courses on financial markets, with education programs designed to meet the needs of the industry. Currently, KIFIN runs 131 classes, and collaborates with foreign institutions (CME, EUREX) 120, , ,988 80,000 60,000 68,987 78,688 76,780 69,341 me : E-Learning me : In-class pe : E-Learning pe : In-class 40,000 total 20, * ME : Mandatory Education * PE : Professional Education

8 I. KOFIA Introduction KOFIA s ROLE : INVESTOR EDUCATION The Korea Council for Investor Education was established in June 2005 as a non-profit organization, providing investors with a variety of education programs to enhance financial literacy and develop sound investment culture. Education for investors in general Increase financial knowledge and skills thereby expanding the investor base Enhance cooperation with financial companies and media Youth financial education Improve financial education practices in schools and provide training for teachers & parents Provide support to vocational school students entering the financial industry Education for people in rural areas Reduce a gap in educational opportunities between metropolitan areas and small cities Expand education to the less privileged (low-income, on welfare) Innovative IT tools for education Develop educational apps for smart phones (U-learning) Run Financial Village programs that make studying finance fun

9 II. CAPITAL MARKET OVERVIEW Korean Capital Market [unit : USD]

10 II. CAPITAL MARKET OVERVIEW Capital Market size [unit : USD]

11 II. CAPITAL MARKET OVERVIEW TRENDS OF MONEY IN STOCK MARKET CUSTOMER DEPOSITS [unit : USD bn] CMA ACCOUNTS BY TYPE [unit : USD bn] RP-Type MMF-Type Merchant Bank-Type Other 열 1

12 II. CAPITAL MARKET OVERVIEW FUND MARKET OVERVIEW Despite the decrease of equity funds, the number of funds rose to 12,721 and the AUM by KRW 47tn, YoY, on the back of increased MMFs and bond funds NUMBER OF FUNDS & AUM [unit : USD bn) As the domestic stock prices fluctuated in a narrow band, the proportion of equity funds declined, YoY. Meanwhile, the proportion of bond fund increased due to a preference for safer assets amid a contracted stock market. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% PROPORTION BY FUND TYPE AUM # of funds equities hybrid-equities hybrid-bond bond MMF others

13 II. CAPITAL MARKET OVERVIEW DERIVATIVES MARKET OVERVIEW The trading volume of Korea s exchange-traded derivatives market, which used to top the global ranking, has dropped since 2011 (options multiplier, etc) TRADING VOLUME [unit : mn contract] About 55% of derivatives are traded on the exchange, among which securities companies take up more than 90%. As for the OTC trading of derivatives, banks account for 88%. OTC vs Exchange-listed [unit : USD tn) 4,000 3,500 3,000 2,500 2,000 1,500 1, , % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Trading Value for Exchange-listed Trading Value for OTC

14 II. CAPITAL MARKET OVERVIEW ELS & RETIREMENT PENSION MARKET OVERVIEW ELS ISSUANCE [unit : USD bn, #) RETIREMENT PENSION MARKET SIZE [unit : USD bn) 70 20,281 22, % , , , , (3,000) Reserves Subscription Rate(%) 0.0 Amount # of Issuances

15 III. FINANCIAL INVESTMENT INDUSTRY OVERVIEW SECURITIES INDUSTRY There are currently 57 securities companies in operation, total assets reaching more than USD 340 billion and the total equity USD 46 billion at the end of INDUSTRY OVERVIEW [unit : USD bn) The net profit of securities companies recorded USD 1.7bn in 2014, while ROE was 4.1%. This is attributable to a jump in profits from proprietary trading amid the reduction of base rates and decreased SG&A expenses due to efforts to cut cost NET PROFIT & ROE [unit : USD bn) Total Assets Total Equities # of companies Net Profit ROE(%)

16 III. FINANCIAL INVESTMENT INDUSTRY OVERVIEW ASSET MANAGEMENT INDUSTRY There are currently 93 asset management companies in operation, total assets reaching approx. USD 5.3 bn and the total equity USD 4.2 bn at the end of INDUSTRY OVERVIEW [unit : USD bn) Total Assets Total Equities # of Companies During 2015, the net profit was USD 473mn for asset management companies. Meanwhile, the ROE increased by 1.09%p from the previous year NET PROFIT & ROE [unit : USD mn] Net Profit ROE(%)

17 III. FINANCIAL INVESTMENT INDUSTRY OVERVIEW REAL ESTATE TRUST & INVESTMENT ADVISORY INDUSTRY There are 11 real estate trust companies, of which total assets and equity amount to USD 1.7bn, and USD 1.3bn respectively. Net profit has risen to USD 15mn, and ROE marked 14.8% at the end of REAL ESTSATE TRUST [unit : USD bn) Total Assets Total Equity Net Profit ROE(%) There are 166 investment advisory companies, of which total assets and equity amount to USD 760mn, and USD 625mn respectively. Net profit has risen to USD 53mn, and ROE marked 11.7% at the end of INVESTMENT ADVISORY [unit : USD mn) Total Assets Total Equity Net Profit ROE(%)

18 ⅳ. KEY CHALLENGERS FOSTERING THE KOREAN CAPITAL MARKET Size matters Providing access to quality wealth management services Expanding global business Introducing principle-based regulations

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