Young Professional Forum 

Smaller and less well-covered than neighboring Chinese and Japanese markets, Korea presents a certain challenge for American investors looking for opportunities. Four of New York’s top investment professionals helped to fill in the gaps, presenting a detailed map of Korea’s economy to an overflow crowd of young professionals. The forum was co-presented by Columbia Business School Asian Alumni Club of New York and sponsored by Merrill Lynch, Korean Business Association of Columbia Business School and Tiger Asia Management, L.L.C.
  
Investing in Korea
Panel Discussion and Networking Session
 

“Korea is growing at cruising speed,” said Donald Hanna, global head of emerging markets at Citigroup, adding that Korea’s macroeconomic situation is solid. Korea is known as an export powerhouse, but Hanna said that in recent years, the domestic consumption has been rapidly expanding as well. Housing prices in Seoul have increased dramatically in 2006 and 2007 and the central bank is getting jittery about an asset bubble. This boom, however, is more a side-effect of success rather than a genuine trouble spot. There isn’t as much housing in Seoul as consumers want, Hanna said, as the city becomes wealthier, potential buyers are bidding up prices.
   
The securities market in Korea has become more complicated as well, added John Lee, director of Lazard Asset Management. But the complexity offers greater opportunity, he continued. When asked about Korean securities in the past, “I used to just say ‘buy Samsung’” said Lee. Now there are numerous, smaller companies which provide great value. And, unlike in many East Asian countries where excellence is highly concentrated by sector, Korea has great companies across the economic spectrum.
   
Eric Yoon, a partner at White & Case law firm, noted a point of concern that others shared: the possibility of a nationalist backlash against foreign investment in Korea. Korea has been a leader in globalization, and benefited tremendously, especially after opening its markets to foreign capital in the wake of the IMF crisis. However, beginning with the KEB–Lone Star investigation, a series of high profile cases in which foreign investors were seen to take huge profits from Korea stirred nationalist resentment. Calls for government action against foreign capital have grown. In response, the government has begun tightening restrictions on tax shelters frequently used by foreign businesses and many fear more action might be in the offing.
   
Kaz Parsch, senior manager of international tax services at Ernst & Young, closed the program with a more detailed discussion of Korea’s tax regime.


  

Wednesday, March 8, 2007

About the speakers 

South Korea is one of Asia’s biggest and most dynamic economies, so potential investorshave a lot to consider before they put their chips down. Fortunately, the panel of distinguished professionals at this roundtable will analyze Korea’s investment opportunities from almost every angle. They will address South Korea’s macroeconomics (GDP, growth rate and inflation), its publicly-traded market structure (capitalization, liquidity, performance historyand significant industries) and its private equity environment (tax policy, free economic zones and deregulation.) The panel will also debate the pros and cons of investing in Korea’s publicly-traded securities versus its private equity and the relative merits of portfolio investment versus foreign direct investment. If there are any questions left at the end, the panelists and participants will be mingling at a post-panel wine and hors d’oeuvres networking session.