[INTERVIEW] 'I want to redress twisted images of stock analysts'

Settings

ⓕ font-size

  • -2
  • -1
  • 0
  • +1
  • +2

[INTERVIEW] 'I want to redress twisted images of stock analysts'

NH Investment & Securities Research Division Managing Director Lee Chang-mok speaks during an interview with The Korea Times at the brokerage's headquarters on Yeouido, Seoul, Wednesday. / Korea Times photo by Choi Won-suk

By Jhoo Dong-chan

A series of movies have been released not only in the United States but also in Korea, portraying the lives of stockbrokers and market analysts.

In the movie, "The Wolf of Wall Street," Oscar-winning Leonardo DiCaprio starred as Jordan Belfort to display rampant corruption and fraud in Wall Street, which ultimately led to his downfall.

The Korean movie, "Money," which premiered in March, starring rising star Ryu Jun-yeol, also portrayed the life of a rookie stockbroker getting mixed up with a shady financial swindler who secretly controls the stock market.

"Besides The Wolf of Wall Street and Money, there have been a number of similar movies trying to display the industry negatively. Unfortunately, stockbrokers and analysts are often portrayed as shady and greedy villainous figures crazed about money," NH Investment & Securities Research Division Managing Director Lee Chang-mok said during an interview with The Korea Times.

"What we really do here is, in fact, quite different from how we are portrayed in these movies. Of course, we do our best to suggest the best market outlook for investors. However, it is structurally impossible to commit such crimes."

In a bid to improve such a twisted image of stockbrokers and market analysts, Lee said he hosted a number of media conferences to introduce how they really operate.

"I even had a lecture with movie and show industry people. I hope there will be a movie that really shows what we really do in the near future," he said.

"I personally like the movie, The Big Short. It did really good job to demonstrate what happened in the 2007 global financial crisis."

No global recession in offing

This is also a difficult time as economy shows a sign of the slowdown, but Lee said it's unlikely to see another global scale recession second to the 2007 global financial crisis.

"There are concerns over a possible global recession after the yield on the benchmark 10-year U.S. Treasury note dipped to its lowest level since 2007. Some said it is a harbinger of another global financial crisis, but I don't think so," Lee said.

"Other yield curves, including the one between three-year and 10-year U.S. Treasury note, are still solid, maintaining a strong spread."

Lee claimed the recent development engulfing the U.S. Treasury bonds is attributed to the Fed's quantitative measure 10 years ago.

"It was a historic quantitative easing," he said. "A tremendous amount of money was injected to the market. We are just witnessing the collecting phase."

He admitted Korea is entering the slowdown, but exports still remain strong.

"Pessimists claim Korea has been trapped by the low-growth trend, but the country has yet to post a contraction," Lee said.

"The country is just entering its economic peak. No country can maintain 7-percent growth for decades. Exports are still solid. The problem is domestic demand. The government should encourage firms to invest in the domestic market."

Cautious optimism

The nation's stock market suffered a rollercoaster ride last year, but Lee suggested negative factors and pessimism have been fully reflected on the bourse, claiming there were more favorable factors in the second half of the year.

"It was a very interesting year," he said.

"Samsung Electronics posted record high quarterly earnings several times last year. Likewise, the big four commercial banks also enjoyed best-ever net profits in the year. However, their shares prices failed to reflect their earnings. Of course, there were a number of unfavorable factors at home and abroad, but I believe too much optimism was also one of the reasons behind the nation's sluggish stock market last year."

Admitting stock prices are not based on firms' current earnings but on expectations for their future business, Lee said investors dumped stocks as share prices failed to meet market expectations despite their record high earnings last year.

"Such hype and disappointment have now gone. I am sure such negative factors have been fully reflected in firms' share prices," he added.

"Foreign factors were also part of the nation's disappointing stock market last year. But they are also rapidly changing."

Unlike the hawkish stance of raising its key rate four times last year, the U.S. Federal Reserve has come under mounting pressures to cut them, citing the U.S. is entering a slow economic pace.

Earlier this month, top White House economic advisor Larry Kudlow said the U.S. central bank should "immediately" cut rates by 50 basis points.

According to U.S.-based news organization CNBC, his comment were followed by a similar stance by Heritage Foundation fellow Stephen Moore, whom U.S. President Donald Trump has said he intends to nominate for a position at the Fed.

"The U.S. is returning to bullish market," Lee said. "This will also be another positive signal for the nation's stock market."



NH Investment & Securities Research Division Managing Director Lee Chang-mok speaks during an interview with The Korea Times at the brokerage's headquarters on Yeouido, Seoul, Wednesday. / Korea Times photo by Choi Won-suk

By Jhoo Dong-chan

A series of movies have been released not only in the United States but also in Korea, portraying the lives of stockbrokers and market analysts.

In the movie, "The Wolf of Wall Street," Oscar-winning Leonardo DiCaprio starred as Jordan Belfort to display rampant corruption and fraud in Wall Street, which ultimately led to his downfall.

The Korean movie, "Money," which premiered in March, starring rising star Ryu Jun-yeol, also portrayed the life of a rookie stockbroker getting mixed up with a shady financial swindler who secretly controls the stock market.

"Besides The Wolf of Wall Street and Money, there have been a number of similar movies trying to display the industry negatively. Unfortunately, stockbrokers and analysts are often portrayed as shady and greedy villainous figures crazed about money," NH Investment & Securities Research Division Managing Director Lee Chang-mok said during an interview with The Korea Times.

"What we really do here is, in fact, quite different from how we are portrayed in these movies. Of course, we do our best to suggest the best market outlook for investors. However, it is structurally impossible to commit such crimes."

In a bid to improve such a twisted image of stockbrokers and market analysts, Lee said he hosted a number of media conferences to introduce how they really operate.

"I even had a lecture with movie and show industry people. I hope there will be a movie that really shows what we really do in the near future," he said.

"I personally like the movie, The Big Short. It did really good job to demonstrate what happened in the 2007 global financial crisis."

No global recession in offing

This is also a difficult time as economy shows a sign of the slowdown, but Lee said it's unlikely to see another global scale recession second to the 2007 global financial crisis.

"There are concerns over a possible global recession after the yield on the benchmark 10-year U.S. Treasury note dipped to its lowest level since 2007. Some said it is a harbinger of another global financial crisis, but I don't think so," Lee said.

"Other yield curves, including the one between three-year and 10-year U.S. Treasury note, are still solid, maintaining a strong spread."

Lee claimed the recent development engulfing the U.S. Treasury bonds is attributed to the Fed's quantitative measure 10 years ago.

"It was a historic quantitative easing," he said. "A tremendous amount of money was injected to the market. We are just witnessing the collecting phase."

He admitted Korea is entering the slowdown, but exports still remain strong.

"Pessimists claim Korea has been trapped by the low-growth trend, but the country has yet to post a contraction," Lee said.

"The country is just entering its economic peak. No country can maintain 7-percent growth for decades. Exports are still solid. The problem is domestic demand. The government should encourage firms to invest in the domestic market."

Cautious optimism

The nation's stock market suffered a rollercoaster ride last year, but Lee suggested negative factors and pessimism have been fully reflected on the bourse, claiming there were more favorable factors in the second half of the year.

"It was a very interesting year," he said.

"Samsung Electronics posted record high quarterly earnings several times last year. Likewise, the big four commercial banks also enjoyed best-ever net profits in the year. However, their shares prices failed to reflect their earnings. Of course, there were a number of unfavorable factors at home and abroad, but I believe too much optimism was also one of the reasons behind the nation's sluggish stock market last year."

Admitting stock prices are not based on firms' current earnings but on expectations for their future business, Lee said investors dumped stocks as share prices failed to meet market expectations despite their record high earnings last year.

"Such hype and disappointment have now gone. I am sure such negative factors have been fully reflected in firms' share prices," he added.

"Foreign factors were also part of the nation's disappointing stock market last year. But they are also rapidly changing."

Unlike the hawkish stance of raising its key rate four times last year, the U.S. Federal Reserve has come under mounting pressures to cut them, citing the U.S. is entering a slow economic pace.

Earlier this month, top White House economic advisor Larry Kudlow said the U.S. central bank should "immediately" cut rates by 50 basis points.

According to U.S.-based news organization CNBC, his comment were followed by a similar stance by Heritage Foundation fellow Stephen Moore, whom U.S. President Donald Trump has said he intends to nominate for a position at the Fed.

"The U.S. is returning to bullish market," Lee said. "This will also be another positive signal for the nation's stock market."



Jhoo Dong-chan jhoo@koreatimes.co.kr


LETTER

Sign up for eNewsletter