Chairman Kwon Yong-won of the Korea Financial Investment Association.(Kofia). (Photo: Kofia)

Korea Financial Investment Association (Kofia) released a total of 21.4 trillion won in direct financing to the small and medium enterprises (SMEs) and the reform-minded firms last year through the capital market, the association said March 31.

Kofia said 4.2 trillion won went to the IPO firms, 9.9 trillion won to purchase corporate bonds, 5.7 trillion won for investments in capital and 1.6 trillion won for investments in funds. The association said the total excludes direct investments in large corporations, only those funds provided to SMEs and reform companies during 2018.

Kofia projected that the funds to be provided to SMEs and reform companies in the next five years would total around more than 125 trillion won. The Kofia chairman also called for efforts to maximize the autonomy and creativity of the capital market.

Financial authorities should not stop at turning them to a “negative system” but should make the system detailed enough to show the impacts on the market from those regulations, in comparison with foreign financial regulations.

He said the ultimate purpose of the change is to rationalize financial regulations in such as way to increase the size of the financial market pie so they can help the growth of the national economy in a medium- to long-term perspective.

We are living in an age where a company that once developed an Internet search engine is now getting into the business of automobile production and providing loans.

“You can never catch up with the most recent development in the financial industry with our past moves,” said the company.
Fortunately, Kofia and the securities industry have been leading digital reforms by introducing the joint certification technology, which is mixed with Blockchain technology, from last year, Kim said

“The US-China trade war and the upcoming tariff talks are the talk of the town now, but we have to also heed the underlying global investment war,” he said.

Kwon cited U.S. e-commerce giant Amazon’s investment in mergers, acquisitions, research and development. In 2017, Amazon’s spending on M&As came to over $14 billion, according to CB insights, while its R&D spending reached $22.6 billion.

He also highlighted the success of Google’s self-driving technology spinoff Waymo, which achieved a test-drive of some 10 million miles thanks to “unwavering investment” over the course of eight years.

Such moves in the U.S. to gain the upper hand in technology are counterbalanced by moves from China’s Guangdong Province to create a financial hub, deemed a Chinese equivalent to Silicon Valley in the United States.

“While the trade war is a current matter, the investment war is a future one,” Kwon said. The Korea Financial Investment Association comprises securities firms, asset management firms and investment advisers under its umbrella.

The remarks came a week after representatives of Korea’s financial investment firms paid a five-day visit to the San Francisco Bay area and Seattle in the United States. The representatives comprised Kwon and the chiefs of 13 securities firms as well as market information provider Koscom, Korea Securities Financial Corporation and Korea Capital Market Institute.

Kofia has 241 members, including securities houses, asset management companies and financial advisory firms, with a combined fund net asset value of 2.4 trillion won (US$2.2 billion) as at October 30, 2017.

The Korea Financial Investment Association is a non-profit, self-regulatory organization in South Korea, founded under the Financial Investment Services and Capital Markets Act. It was established on February 4, 2009, through the merger of the Korea Securities Dealers Association, the Korea Futures Association, and the Asset Management Association of Korea.