SKorea considers allowing hedge funds - finance minister |
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Mon, 14 May 2007 08:56
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SEOUL (XFN-ASIA) - The government will consider allowing hedge funds to operate as it strives to upgrade the economy amid competition from foreign manufacturers, the finance minister said.Kwon O-Kyu told a forum the government would step up efforts to revitalise the asset management industry through diverse sales channels for funds and deregulation.'Once a solid foundation is laid for asset management after the Capital Markets Consolidation Act takes effect, we will consider plans for allowing hedge funds,' he told a conference here.He said the government would send a related bill to parliament for approval in June.'Some point to the side effects of hedge funds, such as increasing financial market uncertainties by pursuing excessive short-term profits and herding to take advantage of fragile, underdeveloped markets,' Kwon said.'Nevertheless, hedge funds can also be used to provide new investment opportunities to investors and to promote the development of financial techniques, thereby upgrading Korea's financial markets to the next level.'Kwon also promised to ease procedures for foreign companies to list on the domestic bourse.He said the economy should shift to 'high value-added innovative' industries to overcome internal and external challenges.Manufacturing faced fierce competition from advanced nations and China and other 'low-wage emerging economies' were catching up quickly.Kwon said that in order to enable an economic paradigm shift, fundamental changes to the financial system were necessary to facilitate the flow of capital in the economy.afp
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