ID :
31074
Wed, 11/19/2008 - 15:27
Auther :

S. Korea's sovereign wealth fund may invest in local financial markets

SEOUL, Nov. 19 (Yonhap) -- South Korea said Wednesday that it plans to allow its sovereign wealth fund to invest in domestic financial markets in an apparent move to bolster the nation's plummeting stock markets.

The Finance Ministry said that it will submit a law revision under which Korea
Investment Corp. (KIC) would be allowed to buy local stocks, bonds and
properties. The ministry aims to pass the revision through parliament within the
year.
Established in 2005, the KIC is currently managing around US$24.8 billion, with
its accumulative profit rate estimated at 7.69 percent until the first half of
this year, according to government sources.
Under the revision, the sovereign wealth fund will also be allowed to issue or
borrow 30 times as much as its capital value and the government will guarantee
the borrowing, the ministry said.
The move comes as the local stock markets have plunged 45 percent so far this
year amid growing jitters that the ongoing global financial turbulence might drag
the economy into a worldwide recession.

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