Short comment
Moon Jae-in, president of South Korea, mentioned about exception of rule of separation between bank and industries for Internet tech companies.
In the country, industrial companies, like Samsung Eletronics, couldn't get more than 5 - 10% shares in commercial banks, and right to participating in management of the banks.
It means that Kakao (035720.KS) which has 10% shares in Kakao Bank, the country's most prominent internet-based lender, could increase the shares in the bank, and get management.
In stock market, Kakao rose by 5.73% with the expectations, but I think it's just one-time event.
There are two points in perspective of the market about this.
Firstly, KT (030200.KS), a rival to Kakao in internet banking service, was off 2.87%.
The bank for KT, K-Bank, got smaller market share than its rival did.
But still, KT could get same benefits with those for Kakao from the deregulation.
Considering that KT is providing telecommunication to the whole country, the benefits from the deregulation would give amazing stimulus to the company which is going through slump with government's policy about telecommunication fees.
Secondly, let see KIH (071050.KS).
The holdings company owns 58% shares of Kakao Bank.
Let see share-price of the holdings.
The share-price was ₩70,000s when Kakao Bank started its service at July, 2017.
The share-price had reached to about ₩100,000 at May, this year.
But a main cause for this was performacne of one of its subsidiaries, Korea Investment & Securities, one of major players in regional securities services with Samsung Securities and Mirae Asset Daewoo.
And share-price has plunged since early June with those of other brokers and its share price is about ₩70,000 now.
I believe Kakao Bank hasn't provided enough stimulus to the holdings, even though association with the internet company has been good enough.
I believe that there will be no difference in the banking service, even if Kakao get KIH's shares.
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Share-price of Kakao could go up with reasonable business models.
But Mr.Moon's mention isn't a good reason to buy Kakao.
I think only-internet-based bank isn't that attractive business.
Moon Jae-in, president of South Korea, mentioned about exception of rule of separation between bank and industries for Internet tech companies.
In the country, industrial companies, like Samsung Eletronics, couldn't get more than 5 - 10% shares in commercial banks, and right to participating in management of the banks.
It means that Kakao (035720.KS) which has 10% shares in Kakao Bank, the country's most prominent internet-based lender, could increase the shares in the bank, and get management.
In stock market, Kakao rose by 5.73% with the expectations, but I think it's just one-time event.
There are two points in perspective of the market about this.
Firstly, KT (030200.KS), a rival to Kakao in internet banking service, was off 2.87%.
The bank for KT, K-Bank, got smaller market share than its rival did.
But still, KT could get same benefits with those for Kakao from the deregulation.
Considering that KT is providing telecommunication to the whole country, the benefits from the deregulation would give amazing stimulus to the company which is going through slump with government's policy about telecommunication fees.
Secondly, let see KIH (071050.KS).
The holdings company owns 58% shares of Kakao Bank.
Let see share-price of the holdings.
The share-price was ₩70,000s when Kakao Bank started its service at July, 2017.
The share-price had reached to about ₩100,000 at May, this year.
But a main cause for this was performacne of one of its subsidiaries, Korea Investment & Securities, one of major players in regional securities services with Samsung Securities and Mirae Asset Daewoo.
And share-price has plunged since early June with those of other brokers and its share price is about ₩70,000 now.
I believe Kakao Bank hasn't provided enough stimulus to the holdings, even though association with the internet company has been good enough.
I believe that there will be no difference in the banking service, even if Kakao get KIH's shares.
-
Share-price of Kakao could go up with reasonable business models.
But Mr.Moon's mention isn't a good reason to buy Kakao.
I think only-internet-based bank isn't that attractive business.