Korean Job Discussion Forums

[GoldMember]

This from todays JoongAng Daily

http://joongangdaily.joins.com/article/view.asp?aid=2898730

Suspected of collectively agitating the local stock market with subjective reports, foreign brokerages have been put under the microscope.

The Korea Securities Dealers Association, which consists of brokerages operating locally, said yesterday it has started inspecting �sell� reports from a total of 19 foreign brokerages in Korea issued over the past three months. It is the first time that all foreign brokerage reports have been subjected to a KSDA probe.

�As you know, foreign brokerages are exerting heavy influence on the market,� said a KSDA official, declining to be named because he is in too low of a position to represent the organization. �We are seeing sharp declines of stocks after foreign brokerages recommended selling them in reports. So we decided to look into whether the reports were accurate.�

The local stock market - comprised of the benchmark Kospi and junior Kosdaq - has become more vulnerable to external factors amid the ongoing financial crisis partly due to a heavy dependence on exports among its listed firms.

Some suspect foreign brokerages are partly responsible for worsening the situation because their reports, backed by worldwide credibility, have caused severe drops in local stocks they recommend as sells.

Last month, shares in GS Engineering and Construction fell by almost the daily limit after sell reports from Credit Lyonnais Securities Asia in Seoul.

On Dec. 3, the French brokerage issued a sell report on Samsung Electronics, and the share price of the electronics giant dropped 2.9 percent on the day. It said Samsung Electronics will post an 800 billion won ($604 million) operating loss next year due to the falling prices of semiconductors and LCD panels.

The KSDA official said the probe will focus on whether foreign brokerages adhered to rules concerning analysis reporting, such as whether they identified sources of data or people which they quoted in the reports.

The Seoul branch of JPMorgan said yesterday it submitted documents required by the KSDA concerning the probe, but declined to comment further. Some other foreign brokerages declined to comment or did not return calls seeking comment.


Now these MORONS want to be a Financial Hub Bub, yet brokers are not allowed to conduct their business freely.
If anyone is at fault it is the Korean brokerages for NOT recommending a sell.
Now lets see why would these bad bad brokerage houses make a sell recommendation? Could it be something to do with.....
Declining sales and plant shutdowns
Management holding onto a bloated workforce
Companies that are grossly overleveraged
Companies that have their massive debts denominated in Japanese Yen.
and finally there is this stupid reason
LOSING MONEY!!!!

Nah, nothing to do with those factors, the brokerages are recommending sell, just to be nasty to Koreans.

These foreign brokerages have world wide credability. I wonder why?
Korean brokerages do not have credability. I wonder why?

Korea Sparkling!. A more appropriate slogan would be Korea, reaching new levels of Stupidity.

[jkelly80]

It's not xenophobia, it's Korean culture!

[Jandar]

What is a daily limit as refered to in this sentence quoted from above.


"Last month, shares in GS Engineering and Construction fell by almost the daily limit after sell reports from Credit Lyonnais Securities Asia in Seoul. "

[GoldMember]

A daily limit is actually exchanges and government MANIPULATING the market, once a security falls by a fallen amount in a given day, trading is suspended, so the poor sucker who did'nt get out earlier enough has too lose more money.

[justaguy]

[Beej]

[victorology]

[in_seoul_2003]

[weatherman]

In the article:

[GoldMember]

Thanks for the thorough explaination Victorology. I still think its market manipulation, just my lowly opinion though.

[el_magico]

[bogey666]

as someone who spent over a decade in that business, I can tell you Liar's Poker is spot on, required reading and about as funny of a book as you'll ever get to read (especially so if you're familiar with the business and can immediately relate to every story Michael Lewis tells)

[samcheokguy]

How does one regulate a business where you're allowed to gamble with borrowed money?

[justaguy]

[bobbyhanlon]

i'd say the foreign broker reports are marginally more trustworthy- after all, would you trust samsung securities' opinion on samsung electronics, or any other samsung company? business and political power in korea is held by too small a group of people for anything like fair analysis of stocks to take place.
take a look at broker reports from any of the leading korean houses- its all 'buy, buy, buy', with the occasional hold. its just not the done thing to say 'sell'. there's probably an element of not wanting others to lose face in that, too.

not that you should trust the big international brokers either. they aren't beholden to the unwritten code of korean equity research, but they do have their agendas, as every investor knows.
which all means.. know your way around a balance sheet, a cashflow statement, and an income statement; read many different sources of information about a stock; have some idea about valuation, etc, etc. and if you don't, stay the hell away! the last thing an investor should do is buy based on an analyst recommendation