2. Agenda
1
South Korea Information
2
Introduction about investments in South Korea
3
Political Status
Political Status
4
Consumer Price Index - - CPI
Consumer Price Index CPI
5
Inflation
Inflation
6
Dross Domestic Product - -GDP
Dross Domestic Product GDP
7
Employment / /Unemployment Rate
Employment Unemployment Rate
8
Waeges
Waeges
9
Business Freedom
Business Freedom
3. Agenda (Cont.)
10
Trade Freedom
11
Fiscal Freedom
12
Government Spending
Government Spending
13
Monetary Freedom
Monetary Freedom
14
Investment Freedom
Investment Freedom
15
Financial Freedom
Financial Freedom
16
Property Rights
Property Rights
17
Freedom from Corruption
Freedom from Corruption
18
Labor Freedom
Labor Freedom
19
Six Reasons to Invest in South Korea
Six Reasons to Invest in South Korea
20
Conclusion
Conclusion
8. Gross Domestic Product - GDP
The Gross Domestic Product (GDP) in South Korea expanded
0.70 percent in the third quarter of 2010 over the previous
quarter, and a great GDP expansion of 3.2 on the last quarter of
2009 happened, so that is great evidence why YES to invest.
9. Gross Domestic Product – GDP (Cont.)
GDP real growth rate: 6.1% (2010 )
country comparison to the world: 0.2% (2009 )
2.3% (2008 )
GDP- Per Capita (PPP) (This entry shows GDP on a purchasing power
parity basis divided by population as of 1 July for the same year).
$30,200 (2010 )
country comparison to the world: $28,500 (2009 )
$28,500 (2008 )
note: data are in 2010 US dollars
GDP – Purchasing Power ability
$1.467 trillion (2010 )
country comparison to the world: $1.383 trillion (2009 )
$1.38 trillion (2008 )
note: data are in 2010 US dollars
10. Political Status
South Korea has a stable government with sustainable
democracy and a healthy infrastructure.
The relationship between North Korea and South Korea is
strained and is a source of political and social controversy
12. Employment Rate
The employment rate in South Korea expanded 23.6 percent in
the last three years, and the employment rate is growth , so
that is great evidence why YES to invest.
14. Wages
•
Employment at one company can mean an average monthly salary of 5
million won ($ 4,360) whereas another company will offer a salary of over
8 million won ($8,000) USD. Finding up-to-date numbers for average
Korean salaries is a challenge. It may be most efficient for you to discuss
pay with a potential employer right off the bat so you know your financial
situation. Bear in mind that the cost of living in Korea is lower compared
to most other countries.
Minimum wage
Gross annual wage
(Intl. dollars)
4,110 South Korean won per hour, reviewed
annually
10,955
15. Business Freedom
Business freedom is a quantitative measure of the ability
to start, operate, and close a business that represents
the overall burden of regulation as well as the efficiency
of government in the regulatory process.
16. Trade Freedom
Trade freedom is a composite measure of the
absence of tariff and non-tariff barriers that affect
imports and exports of goods and services.
17. Fiscal Freedom
Fiscal freedom is a measure of the tax burden imposed by
government. It includes both the direct tax burden in terms of the
top tax rates on individual and corporate incomes and the overall
amount of tax revenue as a percentage of GDP.
19. Monetary Freedom
Monetary freedom combines a measure of price stability with an
assessment of price controls. Both inflation and price controls distort
market activity. Price stability without microeconomic intervention is
the ideal state for the free market.
21. Last Free Trade agreements
After more than three years of negotiations, South Korea and the
EU officially signed a free trade agreement on October 6 2010.
If the trade pact is ratified by both parliaments, the agreement would
take provisional effect on July 1 2011. We believe South Korea’s
aggressive pursuit of free trade agreements will boost the
investment environment and growth potential.
On the whole, South Korea has 27 of such agreements in various
stages of preparations (concluded, under negotiation, proposed)
and we expect the country’s move towards increasing trade and
investment liberalization to bring considerable benefits to its
economy, bolster the business environment and boost growth
prospects.
22. Foreign direct investment - FDI
Foreign investment in South Korea was tallied at $654.2
billion as of the end of last year, up 21.3 percent from a
year earlier, the Bank of Korea (BOK) said.
Also, securities investment, which accounts for most
foreign investment in South Korea, rose 14.6 percent to
$357.3 billion, while direct investment grew 12.5 percent
year-on-year to $118 billion.
Stock investment by foreigners reached $276.4 billion
as of the end of 2006, up 10.8 percent from a year
earlier, while bond investment rose by 29.8 percent to
$80.8 billion.
23. Foreign direct investment - FDI (Cont.)
The South Korean government allows the following general
incentives for foreign investors:
Cash grants for the creation and expansion of workplaces for hightech business plants and R&D research centers;
Reduced rent for land and site preparation for foreign investors;
Grants for establishment of convenience facilities for foreigners;
Reduced rent for state or public property; and
Preferential financial support for investing in major infrastructure
projects.
24. Financial Freedom
Financial freedom is a measure of banking efficiency as well as a
measure of independence from government control and interference
in the financial sector.
25. Property Rights
It measures the degree to which a country’s laws protect private
property rights and the degree to which its government enforces
those laws.
27. Labor Freedom
The labor freedom component is a quantitative measure that looks into various aspects
of the legal and regulatory framework of a country’s labor market. It provides crosscountry data on regulations concerning minimum wages; laws inhibiting layoffs;
severance requirements; and measurable regulatory burdens on hiring, hours, and so
on.
28. Labor force By occupation
Agriculture 8%,
Industry 19%,
Services 73%
29. Annual Working Hours
•South Korea is the Highest in annual working hours per worker.
•The labor market is somewhat inflexible which can be burdensome
for private companies.
30. Six Reasons to Invest in South Korea
1- Stocks Are Cheap and Trending Higher
2- The South Korean Economy is Growing Solidly
3- Inflation is in Check
4- The Currency is Undervalued
5- The South Korean Government’s Balance Sheet
is Solid
6- South Korea is on the Verge of a Promotion.
31. Six Reasons to Invest in South Korea
1.
2.
3.
Stocks Are Cheap and Trending Higher:South Korea currently trade for less than 10 times forward earnings and less than
one times sales, on average. And the only thing better than cheap stocks are cheap
stocks with positive momentum on their side.
The South Korean Economy is Growing Solidly:
Based on estimates from The Economist and International Monetary Fund, South
Korea’s GDP is likely to grow by at least 5.75% this year 2010 and more in 2011.
Inflation is in Check:
Consumer prices were only up 2.6% in July, year-over-year. But the Bank of Korea
(BOK) is already on the scene to prevent inflation from topping 4%. In fact, the bank
announced a surprise interest rate hike to 2.25% in July 2010.
32. Six Reasons to Invest in South Korea
4.
5.
6.
The Currency is Undervalued:
Any way you look at it, the South Korean won is undervalued relative to the U.S.
dollar. In fact, Barclays estimates the discount at approximately 35%. Meanwhile,
The Economist’s Big Mac Index pegs the discount around 20%. Even if stock prices
stagnate, we can profit from an appreciating currency.
The South Korean Government’s Balance Sheet is Solid:
Unlike some countries, South Korea didn’t overeat at the debt buffet. Public
spending only accounts for about 25% of GDP, compared to 115% in Greece and
192% in Japan. Moreover, the country is enjoying a current account surplus, thanks
to strong exports, particularly of semiconductors and automobiles.
South Korea is on the Verge of a Promotion:
As MSCI (MSCI is a leading provider of investment decision support tools to
investors globally ) put it, South Korea “continues to meet most developed markets
criteria… notably economic development, market size and liquidity.”
