S. KOREA ATTEMPTS TO COOL OVER-HEATED STOCK MARKET
South Korea will press institutional
investors to sell shares they are holding and oblige them to
buy monetary stabilisation bonds if they want to make further
stock investments, a finance ministry spokesman said.
    He said Finance Minister Chung In-yong, Bank of Korea
Governor Park Sung-sang and officials of the Securities
Supervisory Board agreed that the stock market was over-heated
and decided to take measures to cool it down.
    Ministry officials said the recent market boom was fuelled
mainly by ample liquidity and excessive demand from
institutions and speculative investors.
    The spokesman said industrial firms with bank loans worth
50 billion won or more should either issue convertible bonds or
offer new shares in order to raise funds to help repay their
loans.
    Securities houses will not be allowed to hold shares worth
more than 40 pct of their paid-in capital and investment trust
firms 50 pct, the spokesman said. But he did not give a
deadline for compliance. Other insitutitions should also reduce
the volume of their share-holdings, he added.
    The composite index, a weighted average of 355 listed
firms, closed at 398.72 yesterday. It started 1987 at 264.82.
    The spokesman said industrial firms with bank loans worth
50 billion won or more should either issue convertible bonds or
offer new shares in order to raise funds to help repay their
loans.
    Securities houses will not be allowed to hold shares worth
more than 40 pct of their paid-in capital and investment trust
firms 50 pct, the spokesman said. But he did not give a
deadline for compliance. Other insitutitions should also reduce
the volume of their share-holdings, he added.
    The composite index, a weighted average of 355 listed
firms, closed at 398.72 yesterday. It started 1987 at 264.82.
 REUTER
