[Viewpoint] Time to get over journalist’s slightMirae Asset invested big bundles of money in Samsung Heavy Industries in the spring of 2005. It bought new shares in the shipbuilder for 5,000 won ($4.40) each, and enjoyed a year-on-year increase of 400 percent. Still, foreign investors displayed a distinct air of indifference in the process.
“Almost 30 years have passed since shipbuilding nearly vanished in advanced countries. Foreign investors are no longer able to appreciate the industry’s true value,” Choi Hyun-man, vice chairman of Mirae Asset Financial Group, said. “Foreigners rely on financial statements to make investment decisions, while we carefully watched a rapidly growing backlog.”
The stock increased in value and Mirae Asset enjoyed incredibly huge profit margins, while foreigners rushed around belatedly.
Leading foreign media outlets were extremely pessimistic about the prospects of the Korean economy from the end of 2008, saying, “Korea will go bankrupt because of its huge foreign debts.”
Foreign investors fled the stock market, and the Kospi plunged below the 1,000 mark. When foreign investors sold their stocks, Korean institutional and private investors bought them up. Then last spring, when Korea emerged as a winner from the global financial turmoil and the benchmark Kospi index surged more than 50 percent, foreigners bitterly regretted their missed opportunity. Foreign investors’ failure was mainly due to their misunderstanding of forward trading in the Korean shipbuilding industry, as it was considered as a short-term huge deficit.
At that time, the Financial Services Commission showed exemplary patterns of behavior. Whenever the FSC held investor relations meetings in London, New York and Singapore, they visited each nation’s leading media outlet to meet with reporters. They provided them with reports and statistical data prepared with great care and asked journalists to “consult our materials hereafter.” Articles criticizing Korea have recently disappeared from influential newspapers and magazines overseas. These efforts were a huge contribution to that phenomenon.
Last Tuesday, an incident took place at a press conference held by Minister of Strategy and Finance Yoon Jeung-hyun to help foreign correspondents understand the latest issues in the Korean economy.
One correspondent asked, “[Korea] has some of the lowest percentage of women in the workplace and it has the highest gap in pay between men and women of any developed country. I’d like to ask you if you think that is because men in South Korea like to go to room salons after work .?.?.”
Yoon gave a wise answer to the embarrassing question, responding calmly that nearly half of the newly appointed prosecutors are women and that Korean women hold the household’s purse strings.
Now the ministry is overreacting to the event. Local media report the ministry will stop public relations services with the correspondent and send a letter of protest to his company’s headquarters in the United States. Embarrassing questions are part and parcel of most press conferences. During the Korea-U.S. Summit meeting in 1998, American journalists subjected former President Bill Clinton to intolerably embarrassing questions related to his extramarital affair.
Foreign correspondents in Seoul enjoyed privileges when authoritarian regimes governed Korea. Some of them boasted of their personal acquaintance with the president. Some foreign correspondents were difficult to regard without shame when they ordered around Korean diplomats as willing tools.
However, Korea, and the rest of the world, has changed. An executive from J.P. Morgan, one of the world’s leading investment banks, said, “We are busy serving Korean customers these days.” Korean firms have gone to the United States and held investor relations meetings there. However, large investors come to Korea for further information these days. They poke and pry to find what they want to know about the Korean economy.
Recently, leading global financial services companies have reshuffled finance professionals with expertise in the dynamic Korean market. There have been many cases in which Korea was still considered an emerging market where young analysts presented a biased report about the country’s economy.
Currently, experienced professionals are in charge of analyzing Korea’s economic and management trends because it has become one of the world’s most profitable markets. Their fields of interest have been expanded from stocks to bonds. For example, Korean national bonds have quickly gained greater popularity than U.S. ones on global financial markets.
If this trend continues, foreign newspaper readers will be very picky about articles and editorials on the Korean economy. Judgment of a journalist and his articles falls on the shoulders of his or her readers. It is not a matter of concern that the government should bicker over. Foreign people treat Korea differently. It is high time we change our own thoughts about Korea, and quickly.
By Lee Chul-ho