S.Korean entities to invest in Indian capital market
KOFIA formalizes bilateral cooperation:
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.
KOREAN MKT WELL DEVELOPED
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.”
MORE OVERSEAS INVESTMENTS
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