S.Korean en­ti­ties to in­vest in In­dian cap­i­tal mar­ket

KOFIA for­mal­izes bi­lat­eral co­op­er­a­tion:

Banking Frontiers - - Kofia - Me­hul@bank­ingfron­tiers.com

Re­cently a del­e­ga­tion from Korean Fi­nan­cial In­vest­ment As­so­ci­a­tion (KOFIA) com­pris­ing play­ers in the cap­i­tal mar­ket in South Korea vis­ited some In­dian or­ga­ni­za­tions like Kalaari Cap­i­tal, Wipro and NASSCOM in Ben­galuru in an ef­fort to get a bet­ter un­der­stand­ing of In­dia’s growth. Chair­man of KOFIA Kwon Yong Won says the visit has been very fruit­ful and through the meet­ings with these en­ti­ties the del­e­ga­tion was able to un­der­stand the growth sta­tus and com­pet­i­tive­ness of In­dia’s in­no­va­tive com­pa­nies. “We were able to dis­cuss ways to co­op­er­ate with In­dian en­ti­ties and ex­plore in­vest­ment op­por­tu­ni­ties in the in­fra­struc­ture sec­tor dur­ing our visit to Mum­bai. The del­e­ga­tion’s visit to In­dia car­ries great sig­nif­i­cance, as it strength­ened our co­op­er­a­tive re­la­tion­ship with In­dia’s cap­i­tal mar­ket that holds in­cred­i­ble growth po­ten­tial and al­lowed us to ex­plore ac­tual busi­ness op­por­tu­ni­ties be­tween com­pa­nies from In­dia and Korea,” said Kwon.

He be­lieves that In­dia has a di­ver­si­fied in­dus­trial struc­ture and its pop­u­la­tion pro­vides a large do­mes­tic mar­ket and abun­dant work­force. Says he: “We be­lieve that In­dia has a very strong growth po­ten­tial. The growth out­look of the coun­try’s ven­ture com­pa­nies and star­tups looks promis­ing more than ever. In­dia is serv­ing as a trade hub of the In­dian Ocean re­gion, con­nect­ing the Mid­dle East and South­east Asia,” says he.


Kwon said the Korean cap­i­tal mar­ket is wit­ness­ing stronger de­mand for over­seas in­vest­ments and fi­nan­cial in­vest­ment com­pa­nies have more room to in­vest over­seas.

“At the end of last year, earn­ings growth of Korean com­pa­nies pushed the coun­try’s mar­ket cap to GDP ra­tio to over 100%. I made 6 pro­pos­als to the the Bom­bay Stock Ex­change Bro­kers Fo­rum (BBF) (i) cre­ate a strong BBF-KOFIA co­op­er­a­tive sys­tem to sup­port the busi­ness ex­changes of our coun­tries, (ii) look for a chance for more Korean bro­kers and AMCs to in­vest in In­dia’s al­ter­na­tive fi­nan­cial prod­ucts such as real es­tate, re­new­able en­ergy, pure water sup­ply sys­tem and ven­ture cap­i­tal, (iii) re­view pos­si­ble ar­eas for co­op­er­a­tion in the fi­nance-re­lated dig­i­tal tech­nol­ogy be­tween Korean and In­dian bro­kers and AMCs - home trad­ing sys­tem, mo­bile trad­ing sys­tem, robo-ad­vi­sor, AI, and big data are some good ex­am­ples, (iv) find ways to fa­cil­i­tate in­vest­ment of Korean fi­nan­cial com­pa­nies in In­dia’s promis­ing IT star­tups and ven­ture firms as the two as­so­ci­a­tions can sup­port Korean com­pa­nies to en­gage in in­vest­ment and M&As with In­dian IT firms, (v) work to­gether to bet­ter un­der­stand each other’s reg­u­la­tions, le­gal and tax sys­tems along with in­vest­ment pro­mo­tion sys­tems and (vi) as a mid-term goal, re­view the pos­si­bil­ity of es­tab­lish­ing a so-called ‘Korea-In­dia Ven­ture In­vest­ment Fund’. The gov­ern­ments and fi­nan­cial in­vest­ment in­dus­tries of both coun­tries can jointly con­tribute to the fund.”


As of end-March 2018, a to­tal of 38 Korean fi­nan­cial in­vest­ment com­pa­nies in­clud­ing bro­kers and as­set man­agers have 116 lo­cal sub­sidiaries, branches and of­fices across 16 coun­tries. There are now 28 branches op­er­at­ing in In­dia and the ASEAN by 19 Korean fi­nan­cial in­vest­ment com­pa­nies.

Mi­rae As­set Global In­vest­ments has been hav­ing pres­ence in In­dia for more than a decade. It be­gan op­er­a­tions in Mum­bai in Fe­bru­ary of this year and was the first Korean bro­ker to do so. Kwon ex­pects more Korean fi­nan­cial in­vest­ment com­pa­nies to show in­ter­est in GIFT City. He feels per­sis­tently strong GDP growth of In­dia should bring in more Korean fi­nan­cial in­vest­ment com­pa­nies into In­dia.

Kwon feels there is sig­nif­i­cant in­ter­est in var­i­ous In­dian fi­nan­cial in­vest­ment prod­ucts. “As of May 2018, Korean as­set man­agers are in­vest­ing in In­dia through 83 funds, which ac­count for 9% of the to­tal fund AUM in­vested abroad. Most of the as­sets are in­vested in In­dian stocks. We can ex­pect grow­ing in­ter­est on In­dia’s real es­tate or in­fra­struc­ture projects,” con­cludes Kwon.

Kwon Yong Won

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