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Pension funds for stock investments to be enlarged

Posted October. 16, 2000 20:02,   


The government plans to amplify the size of various collective funds to be used for stock investments next year in an attempt to boost the sluggish stock market.

Finance and Economy Minister Jin Nyum revealed Monday to reporters at the Korea Federation of Banks building in Myongdong that amplifying the size of pension funds for stock investments would be desirable to promote stock trading. Jin asserted that there would be no danger in raising 20-30 trillion won of funds for stock investments, implying that the magnitude of funds would be enlarged next year. The pension funds to be raised by the government for the promotion of stock trading would be established in investment trust companies by the end of this month at the earliest, and would be further raised to 1.5 trillion won by the end of the year.

On the other hand, Jin gave a negative response to the question of debt-to-equity swaps for Hyundai Engineering & Construction Co. (HEC), stating that debt to equity swaps would be difficult for the affiliates of the four largest conglomerates. However, the government would probably allow HEC to convert its debts into equities if it spins off from its parent company and is excluded from becoming one of the affiliates of the four largest conglomerates.

On the issue of the partial deposit insurance system, Jin asserted that it would be implemented, despite the opposition party's request for it to be delayed, by adhering to principles and within a capacity that will minimize insecurity in the financial market.

Consequently, it goes without saying that the Ministry of Finance and Economy will launch the system in January next year with the ceiling per person increased to 50 million won as originally planned.

The MOFE will announce the details of the partial deposit insurance system on Tuesday after final consultations between the government and the ruling party.