Korea’s Tongyang Group’s financial woes to deepen from Oct

September 2, 2013 Leave a comment

Tongyang Group’s financial woes to deepen from Oct

2013.09.02

Concerns are mounting in the corporate bond market over Tongyang Group’s fundraising capacity. This is because the Group is expected to face setbacks in financing as Tongyang Group’s major affiliated companies have suffered from a series of credit rating downgrades ahead of the implementation of financial investment regulation amendments in October. The issuance of debt securities by Tongyang-affiliated companies has totaled 576 billion won ($520 million) this year, according to financial investment sources Monday. They have been able to attract a large number of investors to buy their bonds even with low credit ratings largely thanks to Tongyang Securities well-renowned for strength in retail bond sales.

However, under the new act to be effective from October, brokerage firms will be banned from recommending investors to purchase junk status bonds or commercial papers (CP) issued by their affiliated companies.

135 billion won worth of corporate bonds issued by Tongyang comes due in the second half of this year. Adding corporate bonds worth 90 billion won that the companies can call redemption, Tongyang should secure over 200 billion won funds by this year, said industry sources.

377 billion won worth of corporate bonds issued by Tongyang Networks, Tongyang Cement & Energy are due to mature in the first half of next year.

Filed under Investing Process, Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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