SOUTH KOREA: MOODY'S SEES CHALLENGES AND EVOLUTION FOR KOREAN SECURITIES SECTOR.

IPR Strategic Business Information Database, May, 2008

Moody's Investors Service says the earnings and profit margins of the Korean securities sector -- poised for transformation, due to competition, deregulation and capital market development -- will likely trend below the historical highs evident in 2007, given global economic weakness and capital market volatility.

Moreover, the adverse environment is likely to intensify competition in brokerage with some firms cutting retail commission rates after a few years of stability, Moody's says. "This outcome will be negative for the industry as brokerage is a bread-and-butter business accounting for 59% of net revenue, although the impact will be uneven and biggest on those most reliant on commission income," says May Yan, a Moody's Vice President and Senior...

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