Photo Image

Despite South Korean Government’s effort to improve its system, stock firms’ research reports are still full of buyers.
 
After Financial Supervisory Service (FSS) reviewed 89,262 research reports of 47 domestic and foreign stock firms, percentage of opinions on sellers by South Korean stock firms was only 0.1%. 
 
Out of entire research reports, 76% of them were about buyers while only 2% of them were about sellers.
 
South Korean stock firms’ practice on presenting opinions on buyers has not changed.  After implementing systems, 992 research reports out of 1,035 research reports on buyers were put out by foreign stock firms.
 
Changes in practice have been practically nonexistent despite implementation of systems.  Number of opinions by foreign stock firms increased from 906 to 992 after systems were implemented.  On the other hand, number of opinions by South Korean stock firms decreased from 46 to 43 after systems were implemented.
 
Number of analytical reports on KOSDAQ-listed companies increased slightly from 9,033 to 9,948.  Percentage of them also increased from 20% to 22%.
 
Public announcement of disparate ratio between target stocks and actual stocks is operated on formal basis.  There were calculation errors on some reports.  There were even times when public announcements were not made.  It was shown that foreign stock firms’ disparate ratios were actually increased after systems were implemented.
 
“Although there are some parts where we can look view optimistically due to systems, there is a possibility of operating systems on formal basis.” said Seok Joon-won, who is the team leader of FSS’ Capital Market Supervisory Office.  “We are going to notify relevant industries regarding errors through meetings and others and we are planning to look for necessary improvements to improve credibility of research reports.”
 
Staff Reporter Ryu, Geunil | ryuryu@etnews.com