SK Hynix's ADR Launch Lowers Barriers for Global Investors
A new era for SK Hynix has begun, allowing overseas investors to buy and sell the company's American Depositary Receipts (ADRs) in the US market without going through the Korean Exchange. This development is expected to broaden the global investment base for Korean companies.
On July 12, SK Hynix's ADRs debuted on the New York Stock Exchange, rising 13.08% on their first day of trading.
Market analysts believe this ADR listing will significantly reduce entry barriers for foreign investors. With the ability to trade SK Hynix in dollars without needing a Korean securities account, access for global investors has improved considerably.
Richard Claude, a portfolio manager at Janus Henderson, stated in an interview with Reuters, "This ADR listing opens the door for global investors, including those in the US, to easily invest in the world's leading HBM company, which was previously difficult to do directly in Korean stocks."
While some speculate that foreign trading may shift to the US market, most analysts believe the impact will be limited. The price difference between the ADRs and the original shares is expected to converge through arbitrage, making complete separation of the two markets unlikely. Additionally, passive funds tracking global indices like MSCI will continue to include the original shares listed on the KOSPI, suggesting that the foreign investment structure is unlikely to change dramatically in the short term.
Government to Revise Property Tax for High-Value Homes
The government is expected to revise property tax regulations by reducing tax benefits for long-term ownership of non-residential properties and increasing taxes on high-value homes. It is also anticipated that the government will reform the long-term capital gains tax exemption for actual residents.
According to Yonhap News on July 12, the Ministry of Economy and Finance is working on a plan to reform the property tax system. Previously, the ministry commissioned a study on measures to normalize the housing market, focusing on comprehensive real estate tax and capital gains tax.
Currently, homeowners with one property can receive tax benefits regardless of whether they reside in the property. If they hold the property for more than five years, they can receive a deduction ranging from 20% to 50%, depending on the duration of ownership, and additional tax credits based on age if the owner is over 60 years old. These two deductions can be applied simultaneously, up to a maximum of 80%, meaning that higher-value homes receive greater tax benefits.
In response, the government is considering measures to increase the burden on high-value properties to curb speculation. The current threshold for imposing property tax on a single home is set at a publicly assessed value of 1.2 billion won. As housing prices rise, the number of properties subject to this tax is also increasing.
The amount of property tax is determined by a combination of the assessed value of the property, basic deduction amounts, and tax rates. The government plans to adjust these factors equitably to arrive at a final burden level.
Police Investigate Allegations of Cover-Up in Jeong Yoon-ki Case
The special investigation team of the National Police Agency is probing allegations of a cover-up in the investigation of Jeong Yoon-ki, who was charged with murdering a high school girl he had never met. On July 12, the special investigation team summoned a police officer who was in charge of the investigation at the time, identified as Officer A, for questioning.
Officer A is known to have led the investigation from the time of the incident through Jeong's arrest, detention, and transfer to the prosecution.
The special investigation team is focusing on the decision-making process that led to applying a lesser charge of general murder instead of the more severe charge of rape and murder against Jeong Yoon-ki.
Additionally, the team is investigating Officer B, the former head of the investigation team, who has been arrested on charges of evidence destruction. They are looking into why a cable tie was found in the vehicle used in the crime but was not secured as evidence, as well as the multiple communications between Officer B and Jeong Yoon-ki's father, who is also a police officer. The investigation also includes whether any conveniences were provided to Jeong during parental visits in detention.
US-Iran Tensions Escalate Over Hormuz Strait Control
Tensions between the US and Iran over control of the Strait of Hormuz have sharply escalated. Following Iran's warning shots at a commercial vessel and its declaration of a full blockade of the strait, the US launched airstrikes on approximately 140 military targets within Iran, prompting Iran to retaliate against US targets in the Middle East.
On July 12, the Iranian semi-official news agency Tasnim reported that the Islamic Revolutionary Guard Corps (IRGC) announced the blockade of the Strait of Hormuz, claiming that vessels were attempting to navigate illegally.
The IRGC stated that it fired warning shots at a vessel that had turned off its navigation system and posed a threat to maritime security. They declared, "The Strait of Hormuz will remain closed until further notice and until US intervention in the region ceases," prohibiting all vessel traffic.
In response, US Central Command (CENTCOM) announced via social media platform X (formerly Twitter) that on July 11 at 7:15 PM Eastern Time, the IRGC openly attacked the Cypriot-flagged container ship 'M/V GFS Galaxy' passing through the Strait of Hormuz, marking the third US airstrike against Iran this week.
According to CENTCOM, one civilian crew member is missing as a result of the attack, which caused a fire on board and significant damage to the engine room, rendering the vessel unable to navigate independently.
Surge in Household Loans Raises Concerns for Banks
The increase in household loans from the five major banks has nearly reached 80% of their annual target for the year. The rapid rise in not only mortgage loans but also credit loans and overdraft accounts has raised alarms within the financial sector regarding household loan management in the second half of the year.
As of July 9, the outstanding household loan balance from the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) stood at 648.36 trillion won, an increase of 3.39 trillion won from the end of last year. This figure is approximately 78% of the annual increase target of about 4.34 trillion won that the banks submitted to the Financial Supervisory Service at the beginning of the year. Three of the five banks have already exceeded their individual targets.
In response, banks are effectively scaling back new household loan operations for the second half of the year. Hana Bank has suspended the acceptance of loan applications for mortgages and jeonse (key money) loans scheduled for September since July 10, having already exhausted the limits for August applications just a week after halting them on July 2.
Shinhan Bank has also closed its loan application channels and is limiting mortgage insurance to reduce mortgage limits. KB Kookmin Bank has lowered the loan limit for home purchases in the metropolitan area and regulated areas from 600 million won to 300 million won. Other banks may also impose additional restrictions if loan demand continues to surge.
* This article has been translated by AI.
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