Internet Firms Top Kosdaq Market
Chosun Ilbo
Firms on the tech-heavy Kosdaq market showed about one tenth of last year's net profits in the first quarter this year, but communications and the Internet firms had better results during the second quarter. The sales profits of Internet-related businesses, in particular, increased by 100 percent in the second quarter. Sales at Kosdaq companies increased narrowly during the first half of this year, but the net profits in the first half of the year decreased by 90.3 percent. The poor business showing of these firms was due to the stagnant domestic economy and to the decreasing profits of financial companies. Both sales and net profits, however, increased during the second quarter. Sales results increased by 5.4 percent in the first quarter, recording about W15.5 trillion. Net profits recorded W231.4 billion that quarter, going back into the black. Sales profits and ordinary profits also increased by 66.7 percent and 282.4 percent, respectively. Internet-related firms showed a first-half net profit of W57.2 billion. Top-10 Internet businesses, including NHN and Daum, showed soaring sales profits during the second quarter, with a 103 percent increase. The medical precision instruments industry recorded a 152.6 percent increase in net profit this year, due to increased investment from semiconductor businesses. Construction firms also maintained increasing profits due to higher product prices and an improved sales environment. The transportation industry, however, which has suffered from the outbreak of the SARS virus as well as from the dwindling orders from communications equipment firms and from travel agencies, showed decreased net profits during the second quarter. The communication equipment industry showed strong business results during the first quarter, but recorded sales losses during the second quarter. The sales profit of the textile and clothing industry was hit by lower domestic consumption, dropping by 43.6 percent. Among Kosdaq firms, 486 businesses, or 62.8 percent, recorded improved profits, while 287 firms, or 37.2 percent, recorded losses during the first half of this year.
China formally rejects Basel II rules
Financial Times China has formally rejected the so-called Basel II rules governing the amount of capital that banks are obliged to operate with, and decided to introduce its own requirements on capital adequacy. Like India, China has decided that the new accord drawn up by the Bank for International Settlements in Basel does not take into account the particular circumstances of banks in developing countries. The move represents yet another assault on the proposals, after years of negotiations to establish new standards aimed at making the world's banking system more efficient. Last week, the Securities Industry Association, which represents more than 600 of the world's biggest securities firms, wrote to the committee drawing up the rules warning they "could have a detrimental impact on the liquidity of capital markets". And earlier this month London Investment Banking Association said Basel II was too complex and prescriptive.
Issues To Watch 2003
The upheavals still confronting the brokerage industry: lawsuits galore, the rising power of independent reps, more consolidation and, of course, ongoing scrutiny from regulators on an assortment of matters, including mutual fund sales. “The biggest challenges for the industry at a time when the business has gotten squeezed — because revenues are down so squarely — is that there's a huge new raft of regulations and requirements,” says Marc Lackritz, president of the Securities Industry Association, the financial services industry's trade association. “The problem is trying to manage in this new environment at a time when you've had to cut expenses.”
Richard Grasso, the chairman of the New York Stock Exchange, sits atop the most important exchange on the planet — a post he has held for eight years. For most of that time, he has been a dominant figure on the Street, pouring hundreds of millions into technology to keep the NYSE on top, recruiting listings from around the globe and, generally, propelling the institution into the 21st century. So far, however, the new century has brought a different tone to the NYSE. After 9-11 and the plunge in trading, it abandoned ambitious expansion plans. The last major open-outcry exchange, it faces growing competition from electronic bourses, and Grasso has become entangled in the corporate governance issues and has been widely criticized for not paying attention to the concerns of investors. How he handles these challenges and shapes NYSE policy in the coming years will have widespread effects on the Street.