It is confirmed that the Korea Exchange has recorded a loss of KRW 14 billion last year in overseas business invested as resource diplomacy in the MB government. It is now believed that the decision to recover the investment amount was made because of the prolonged loss of the overseas joint venture including the Lao Stock Exchange. The Korea Exchange reported a total loss of KRW14.2 billion on the Laos Securities Exchange (LSX) and the Cambodia Stock Exchange (CSX) during the general shareholders` meeting on March 30. The Korea Exchange has been investing in these overseas exchanges since the time of the MB government in 2011. However, it seems that the loss was handled as the deficit increased and became insoluble every year.

The Lao Stock Exchange is an exchange opened by the Korea Exchange and the Lao government in 2011, the time of the MB government. The total amount invested in the Korea Exchange by the Korea Exchange amounted to KRW 15.1 billion. However, the Lao Stock Exchange has been in a deficit since 2011, the first year of the opening of the exchange, and the Korea Exchange swapped 5 billion won in losses last year under the accounting standard. As a result, book value dropped to 3.1 billion won at the end of last year. The loss amounted to W12bn for seven years.

Meanwhile, the Cambodian Stock Exchange, which invested in 2009, is also in a similar situation. The cumulative contribution of the KRX reached KRW10.2 billion, but the value of the book was completely dismissed by the loss of KRW4.9 billion last year. In particular, it signed a joint venture contract with the Ministry of Finance and Economy of Cambodia and decided to invest 45% and 55% of cash and in kind, respectively. However, the Cambodian government did not complete the investment yet, It is expected to grow.

The Korea Exchange (KRX), which completed a total investment of KRW 6.5 billion by the end of last year, lost 4.4 billion won to the Tashkent Stock Exchange (RSE), reflecting foreign exchange losses, resulting in a book value of KRW 2.1 billion. In the first year after the investment was completed, the book value plummeted to one-third.

The MB government believes that investing in the past as a means of expanding foreign capital markets and overseas capital markets has led to the current poor growth in the financial investment industry. An expert from the financial investment industry pointed out that "the early stage of the investment has been pointed out that the business is proceeding without a sufficient feasibility study," he pointed out, "the overseas exchange support project that was unreasonable in the Lee Myung-bak administration is eventually leading to massive loss." The official said, "According to an outside auditor`s opinion that we should not put off any further recognition of the loss, we believe it reflects all of the loss last year."

The Korea Exchange appears to have shaken foreign investment shortfall once the net profit surged due to the stock market boom last year. In fact, the Korea Exchange recorded a net profit of KRW 71.5 billion for the large-scale loss of overseas business last year, and grew 24.8% from KRW 57.3 billion in the previous year. An official at the Korea Exchange said, "Although losses are generated in overseas business, the impact on the financial structure of the exchange is limited." In addition, the exchanges are constantly asking for plans such as cost reduction and profit diversification. "

However, the financial investment industry points out that the exchange is too slow for overseas business, causing a lot of insolvency. An official from the financial investment industry said, "Although the Korea Exchange has improved its year-on-year profit, its profitability has deteriorated compared to overseas exchanges." In addition to overseas operations, efforts to improve profits from structural aspects such as fee systems and product portfolios we look for it. "

By Kim Dong Wook east@


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