The South Korea has achieved an outstanding high degree of economic growing after experience several political and fiscal challenges in the past several decennaries. Initially, GDP per capita of South Korea was similar with degrees in the low developing states of Africa and Asia. The hapless state productiveness chiefly due to the big debt-finance caused by authorities determination on restructure economic policy that sweep the focal point on labor-intension visible radiation industries and exports. At the get downing measure, the authorities pattern with currency reform, enhanced fiscal establishments, and established flexible economic planning. After 10 old ages of policy restructuring, South Korea transformed the bing financial and fiscal policies to supply strong support for development of heavy and chemical industries, consumer electronics, and cars. Fabrication and industrial[ 1 ]are persistently to turn rapidly in the 1980s and early 1990s. Besides, South Korea besides directs their economic system toward multi-sectors developments which including other sectors such as agricultural[ 2 ], while fabrication, heavy industries and exports become the chief beginnings of state ‘s income.

South Korea had one of the universe ‘s fastest-growing economic systems from the early 1960s to the late 1990s, and South Korea is still one of the fastest-growing developed states in the 2000s, along with Hong Kong, Singapore, and Taiwan, the other threeA Asiatic Tigers. South Korea is presently become high-incomeA developed state and the most industrialised OECD states member It ‘s besides the 20 largest economic systems among the universe. South Korea has aA market economyA which ranksA 13th ( 2011 ) A in the universe by nominal GDP and 12thA byA buying power parityA ( PPP ) . The South Korean economic system is greatly rely on international trade, and in 2010 South Korea was theA exporter andA tenth largest importerA in the universe, particularly for industries such as electronics, telecommunications, car production, chemicals, ship building and steel[ 3 ]. Their major export marketsA ( 2011 ) consist of China 24.4 % , US 10.1 % , Japan 7.1 % , and major importers to South KoreaA ( 2011 ) including China 16.5 % , Japan 13 % , US 8.5 % , Saudi Arabia 7.1 % , Australia 5 % . Today, South Korea is the United States ‘ seventh-largest trading spouse and is the 15th-largest economic system in the universe. The landmark U.S.-Korea Free Trade Agreement ( KORUS FTA ) was permitted by both states ‘ peculiar authoritiess in late 2011 and commenced on March 15, 2012. The understanding is predictable to heighten exports by one million millions of dollars yearly for both states and provide legion new export-related employments in Korea and the United States.

In latest old ages, Korea ‘s economic system has shift from the centrally planned and government-directed investing theoretical account, it headed for a more market-oriented economic system. During 1997-98 Asiatic fiscal crises, South Korea recover from economic system downswing with aid from the International Monetary Fund ( IMF ) and mostly supported by extended fiscal reforms that reinstate markets ‘ stableness, with growing rates of 10 % in 1999 and 9 % in 2000, nevertheless, the consequence of planetary economic system downswing and lower entire export allowed the growing to 3.3 % in 2001. Government stimulate banking industry to supply higher recognition bound for citizen in advancing consumer disbursals ( led to 7.0 % growing in 2002 ) , yet, it slowed growing to approach 3 % once more in 2003 due to consumer overspending and additions in family debt and bankruptcy. Economic public presentation improved after 2004 chiefly contributed by recovery from exports trading and the growing rate are remain and higher than 4 % after 2004. With the beginning of the planetary fiscal and economic crisis in the 3rd one-fourth of 2008, one-year GDP growing slowed to 2.3 % in 2008 and merely 0.2 % in 2009, but the South Korea is rapidly recover and achieved 6.1 % of growing rate in 2010. In malice of the South Korea economic system ‘s high growing prospective and noticeable structural stableness, the force of North Korea and its political hazard do earnestly impact on their recognition evaluations in stock market, it creates inauspicious consequence on South Korea fiscal markets. The consequence of terrorist act on capital markets is acquiring serious presents.

On the other manus, South Korea ‘s economic experience several challenges in economic system, fiscal and population. The population in South Korea is quickly aging and most of the productions are back uping by older coevals. South Korea besides confronting structural jobs including the inflexibleness of South Korea ‘s labour ordinances, the dealingss between direction and workers needed to be improved. Besides, the developing fiscal markets in South Korea slowed the growing rate, and a general deficiency of regulative transparence. Furthermore, the heavy trust on exports ( contain half of GDP ) besides one of the long-run rivals for South Korea. Korean policy shapers have concerned about switching of corporate investing to other lower salary states such as China, and by Korea ‘s fluctuating rates of foreign direct investing ( FDI ) .

2.1.1 South Korea Financial and Banking Industry

Before 1997 crisis, the fiscal and banking industry is monitored by South Korea cardinal bank, the government-owned Bankss have control economic activities by offer credits to those endeavors who complied with the ordinances and scheme established by authorities, while cut-off recognition of those who non follow. However, South Korea authorities forced to reform and alter the manner of supervising the fiscal system during 1997 crisis, with advices from IMF-led deliverance bundle conditioned on economic restructuring. South Korean authorities began the restructure of fiscal market by minimise its intercession in the fiscal sector, such as privatized all public Bankss. Merely 2 development Bankss[ 4 ]still under supervised by authorities, they in-charge for providing medium and long-run recognition for both export industries and the heavy-equipment and chemical industries. In fulfilment with the IMF advice, South Korea has opened their fiscal sector to foreign corporations by sold one of its privatized Bankss to foreign bidders. As a consequence of old ages of authorities misdirection, particularly the relentless tight authorities control of fiscal services, the Bankss and insurance companies are still developing and undergo legion of managerial jobs. It ‘s expected several old ages necessary to be taken to work out the underdevelopment issue in fiscal market.

As the effect of reforming in fiscal market after 1997 crisis, authorities regulators closed down approximately 498 fiscal establishments, including 11 Bankss, 21 merchandiser banking corporations, 13 insurance companies, 16 securities houses and investing trust companies, and 437 other non-banking establishments. In 2000, the fiscal system consisted of 22 Bankss and 1000s of non-bank establishments, including 5 merchandiser banking corporations, 43 securities houses, 36 insurance companies, 28 investment-trust companies, 15 leasing companies, and 7 credit-card issuers. Non-bank establishments consist of several common nest eggs and finance companies, recognition brotherhoods, community recognition co-ops, postal nest eggs programs, and insurance, installment-credit, and venture-capital companies. Opening fiscal market to foreigner attract 44 foreign Bankss making concern in Korea, and some Korean Bankss have been taken over by foreign Bankss, those foreign Bankss operate under regulative conditions about similar with domestic Bankss, but they are free of direct control by the South Korean authorities. However, they are non permit to hold a subdivision system, and therefore their retail operations are little.

Besides, South Korean authorities injected big capital to back up Investment trust companies ( ITCs ) that confronting big capital backdown and earnestly damage caused by the bankruptcy of the Daewoo group in late 1999, as most of them is the chief bond buyers of Daewoo group. The South Korean authorities besides authorities organizes the insurance industry, which is the universe ‘s 6th largest in footings of premium income and has been opened to foreign investors. Many insurance companies suffered of crisis and close down and the sum of companies survived in 2000, included 23 life-insurance companies ( 7 foreign companies and 3A joint ventures, and 13 non-life insurance companies ) .

2.1.2 South Korea Stock Exchange ( KRX )

The Korea Exchange ( KRX ) is a self-acting association organized by the Ministry of Finance and Economy ( MOFE ) . The Stock Market Division of the KRX was instituted on 11 February 1956 through combined parts from Bankss, insurance companies and securities houses. AnA entryA ofA investmentA capitalA was more noticeable after 2000 when the South Korean authorities rises up the regulatoryA upper limitA onA foreignA ownershipA of ordinary companies, and increased the per centum of foreign ownership inA publically heldA companies from 8 % to 40 % . KRX is now graded 15th among the universe stock exchange and had 1,796 listed companies with a combined market capitalisation of $ 1.1 trillion ( October of 2012 ) . The Korea Exchange was established through the incorporation of Korea Stock Exchange, Korea Futures Exchange and KOSDAQ Market Division under the Korea Stock & A ; Futures Exchange Act.

The structural of KRX is a typical order-driven market and similar with other developed stock exchange, where bargain and sell orders vie the best monetary values without a peculiar market shaper. However, the chief challenge of South Korea stock market is the force of North Korea which causes unpredictable geopolitical hazard, A which leads to crisp bead in stocks as the contemplation of the loss of investors ‘ assurance and uncertainness over possible military struggles between the two Koreas. The intelligence of sensitive military preparedness in the North Korea on May 25 2010 impact on South Korea ‘s stock market and foreign exchange markets. South Korea disburses an estimated $ 2.5 billion from its foreign exchange militias to procure the won exchange rates. Discernible fluctuations reflect in the KOSPI and foreign exchange markets as consequence of North Korea ‘s first atomic trial on October 9, 2006, 2nd atomic trial on May 25, 2009, and the current crisis on the Korean peninsula. Any intelligence from North Korea ‘s armed forces still play an of import function in influence South Korea stock market even South Korea has solid economic growing, changeless current history excess and stronger credibleness of economic system.

2.2 Overview of Malaysia Economy

Malaya entreaties become the 5th “ tiger ” of East Asia, or freshly industrialised economic system, following to Taiwan, Korea, Hong Kong, and Singapore.A However, Malaysia is still behind Singapore in its economic system and fiscal market development, even Malaysia is more geographically dispersed, and richer in natural resources than Singapore. Malaysia is a middle-income state, has transformed the economic system structural from a maker of natural stuffs into an emerging multi-sector economic system in the beginning of 1970s. In 2011, the GDP of Malaysia was about $ 450 billion, the 3rd largest economic system in ASEAN andA 30th largest among the universe, with one-year rising prices every bit low as 3.2 % ( 2011 ) and low unemployment averaging 3.1 % ( 2011 ) .

In the 1970s, the primary economic system activity that depended on natural resources such as excavation and agricultural-based economic system has began transform to go a more multi-sector economic system. Malaysia authorities has shift the development focal point toward industrial and fabrication sectors, which chiefly contribute to higher economic system growing rates in 1980s. the successful transmutation from natural resources-based economic system into industrialised economic system is strongly supported by big investing which attracted by geographic location, deep-water ports, modern airdromes and transit system, telecommunications, and dependable power and H2O installations, and it motivate foreign investing through offer legion advantages for alien through ordinances such as 100 % foreign ownership and Taxes street childs. After transformed the economic system policy, the economic productiveness are chiefly support by fabricating[ 5 ]and agribusiness[ 6 ]. Malaysia is among the universe ‘s prima exporters of semiconducting materials, air conditioners, gum elastic baseball mitts, and consumer electronics. Besides, Malaysia every bit good exports natural and agricultural resources and the most expensive exported resource is petroleum. Although Malaysia has switch its economic construction off from fabrication and alteration toward a more diversified market, nevertheless, Malaysia still remains as one of the universe ‘s largest manufacturers of palm oil. The chief exporter spouses ( 2011 ) to Malaysia including China 13.1 % , Singapore 12.7 % , Japan 11.5 % , US 8.3 % , Thailand 5.1 % , Hong Kong 4.5 % , and India 4.1 % .

The authorities is besides seeking to decrease its dependance on province oil manufacturer ( PETRONAS ) as the oil and gas sector supplies more than 40 % of authorities gross, which is the domain income beginning and any alterations of oil manufacturer might mostly impact on authorities budget policy. Malayan authorities has advancing touristry in Malaysia as attempt in diversifying the economic and reduces the trust on exports. Therefore, touristry has become Malaysia ‘s 3rd largest beginning of income from foreign exchange. However, Malayan authorities confronting challenge in this sector since touristry threatened by the negative effects of air and H2O pollution as the consequence of turning fabrication industry. Furthermore, Malaysia besides imports electronics, machinery, crude oil merchandises, plastics, vehicles, Fe and steel merchandises, chemicals. The chief importers ( 2011 ) contain of China 13.2 % , Singapore 12.8 % , Japan 11.4 % , US 9.7 % , Indonesia 6.1 % , Thailand 6 % , and South Korea 4 % . As the consequence of exports are a major constituent of GDP, Malaysia might be exposed to a autumn in trade good monetary values, and higher exposure of economic chief activity to international trade might put Malaysia at higher hazard being influence and negative affected by planetary fiscal crisis. Meanwhile, Malaysia is sharply developed into a Centre ofA Islamic banking and planetary Islamic fiscal, which can be noticeable through additions in the sum of Islamic bond and Islamic Bankss, which Malaysia ‘s Islamic banking assets late reached USD65.6 billion with an mean growing rate of 18-20 % yearly.

2.2.1 Malaysia Financial and Banking Industry

Malaysia is quickly developing the fiscal service sectors, which regulated byA Bank Negara Malaysia, to carry through demand of the economic system growing. Malaysia ‘s economic system beneficiated form big sum of influx of Foreign Direct Investments ( FDIs ) before 1997, it ‘s provide inexpensive credits and mostly contribute to the economic structural transformed and rapid economic growing in multi-sectors in economic system. After the 1997 crisis, the cardinal bank introduced Financial Sector Master program in 2001 purpose to reconstruct function of the finance sector in economic system. The cardinal development in the maestro program has shift to Islamic fiscal and banking which tend to put Malaysia as the centre of Islamic banking over the universe. As portion of the attempt taken to better the fiscal service sectors, Malaysia established a computerized banking payment system, advancing growing of electronic payment systems and electronic banking.

Therefore, Malaysia turn out go the first state to put to death a double banking system ( Islamic and Conventional systems ) in the fiscal system. Conventional Bankss such as HSBC Bank Malaysia Berhad, OCBC Bank Malaysia Berhad and Standard Chartered bank Malaysia Berhad began to participant in Islamic banking Scheme ( IBS ) . Malaysia Islamic banking market has become more competitory as they declared that the foreign equity ownership bound has been move up from 49 % to 70 % in 2009 and allowed foreign Bankss to put up subdivisions web andA micro-creditA installations in Malaysia. This advantage has attracted foreign Muslim Bankss such as Al Rajhi Banking and Investment Corporations, Asian Finance Bank and Kuwait Finance House to get down their operation in Malaysia. The Malaysia Islamic Capital Market ( ICM ) is another attractive force of enlargement in Islamic finance in Malaysia. Malayan authorities provides ceaseless merchandise invention and a comprehensive fiscal substructure to back up the development of Islamic Capital Market. As the consequence of those supportive ordinance, legal and Shariah model, the entire net plus value of Shariah compliant financess in Malaysia has grew three-base hit in the past 5 old ages clip, which increased from RM8.5 billion ( US $ 2.81 billion ) in 2006 to about RM24 billion ( US $ 7.95 billion ) in January 2011, and the entire figure of Shariah compliant financess launched in Malaysia has approximately doubled from a sum of 79 financess to 152 financess.

2.2.2 Malaysia Stock Exchange ( KLSE )

The Bursa Derivatives is wholly owned by Bursa Malaysia Berhad and chiefly controlled by the Ministry of Finance in Malaysia. It operates under the supervising of the Securities Commission and is managed by the Capital Market and Services Act 2007. When Malaysia experienced the 1997 crisis, the Kuala Lumpur Stock Exchange ( KLSE ) decreases its value to about half of the market value, Dropped from RM807 billion in the center of 1996 to RM376 billion in the center of 1997. As the recovery action to halt the autumn in stock exchange market value which affected by the crisis, Malayan authorities enforced currency and capital controls, locked in foreign investors ‘ portion retentions for 1 twelvemonth to avoid farther foreign capital backdown, and commenced a share-buying strategy with the government-controlled financess. The fiscal services start to retrieve bit by bit in 1999 and 2000, and the authorities easy relieved a assortment of limitations and province control in this stock exchange sector. Currently, Malaysia stock exchange had a figure of 931 listed companies with combined market capitalisation of RM1.3 Trillion ( October of 2012 ) under good supervised of authorities and quickly additions in the figure of listed companies.

Malaysia Stock Exchange is vary with Stock exchange in other states, as the ownership construction of the stockholders is sphere and bulk held by peculiar parties such as authorities pension patrons, or named as Kumpulan Wang Simpanan Pekerja ( KWSP ) . Therefore, the Malaysian Stock Exchange is extremely interrupted and influenced by authorities sectors, compared to Stock market in South Korea and Thailand[ 7 ]. In 2012, the Malayan authorities pension patron is the stockholders for 212 listed companies ( out of 931 listed companies ) , which is amounted about 23 % of the stock market. The maximal per centums of the portions owned by authorities pension patron is up to 64.9 % of the listed company ( Malaysia Building Society Bhd ) , which more than half of the company ownership and capable in any chief determination devising. Besides, the portions ownership of authorities consists of listed companies in different sectors that play of import functions in economic system development, such as banking, telecommunications, plantation and etc.

2.3 Overview of Thailand Economy

Thailand is an emerging state that benefit from universe ‘s highest growing rate of mean 12.4 % yearly from 1985 to 1996, and considered as aA freshly industrialised state. In 1997, the exposed failings in fiscal sector contract the economic system growing and led to a crisis that uncovered fiscal sector failings, theA Chavalit YongchaiyudhA disposal forced to drift the currency and Prime Ministry has been resigned for its slow response to the crisis. The Asiatic fiscal crisis has damaged the baht exchange rate from Baht 25/US dollar ( during 1978 to 1997 ) to its lowest point of Baht 56/US dollar in beginning of the 1998. The recovery of Thailand ‘s economic system started in 1999, from a contraction of 10.8 % in 1998, spread outing 4.4 % in 2000 and remain in scope of 5 -7 % in the undermentioned 4 old ages. The economic system growing was chiefly supported by strong exports, which motivated by comparatively weak Baht. AS the consequence of weakening of the US dollar and stronger Thai currency, the Baht has adjusted to Baht 33/ US dollar in 2008, and pegged at Baht 30.90/USD in 2012. Thailand ‘s economic system has experience challenges from instability military conditions and natural diseases. Growth in 2005 – 2007 is lower at 4-5 % as the consequence of the investor and consumer assurance damaged by uncertainness politic ; growing in 2001 achieved every bit low as 2.2 % due to softening of the planetary economic system and interrupted by historic implosion therapy in the industrial countries north of Bangkok that destroy the bulk of the fabrication sector. In 2011, the GDP of Thailand was about $ 602 billion, ranked 25th largest among the universe, with one-year rising prices every bit low as 3.8 % ( 2011 ) and low unemployment averaging 0.7 % ( 2011 ) . This classifies Thailand as the 2nd largest economic system in Southeast Asia after Indonesia. In malice of this, Thailand ranks in the center in the wealth spread in Southeast Asia as it is the fourth richest state harmonizing to GDP per capita, after Singapore, Brunei and Malaysia.

Thailand ‘s economic system is mostly dependance on export activity, which contributes more than half of the one-year GDP.A Initially, the exports is chiefly focus on agribusiness merchandise such as rice, manioc ( cassava ) , gum elastic, maize, sugar cane, coconuts, and soya beans. Rice is the chief harvest in Thailand and it is the universe ‘s no.1 exporter of rice, exporting more than 6.5 million dozenss of polished rice yearly, approximately 55 % of the land country is used for rice production. 49 % of Thailand ‘s labour force is employed inA agribusiness ( lesser compared to 70 % in 1980 ) due to the development from labour intensive and transitional methods into a more industrialised and aggressive sector.A However, the function of agribusiness merchandise in lending to GDP has decreased bit by bit while authorities transforms the economic system structural toward fabrication and industrialisations[ 8 ]. Thailand becomes the universe ‘s second-largest tungsten manufacturer and third-largest Sn manufacturer. Thailand achieved entire exports amounted $ 219.1 billion ( 2011 ) and ranked 25th among the universe, its chief export spouses ( 2011 ) such as China 12 % , Japan 10.5 % , US 9.6 % , Hong Kong 7.2 % , Malaysia 5.4 % , Singapore 5 % , and Indonesia 4.4 % . Since Thailand is deficiency of certain natural resources, its import capital goods, intermediate goods and natural stuffs, consumer goods and fuels from Japan 18.4 % , China 13.4 % , UAE 6.3 % , US 5.9 % , Malaysia 5.4 % , and South Korea 4 % . Other than fabricating and agribusiness, Thailand besides developing itsA touristry sector, which contribute about 6 % of the economic system.

2.3.1 Thailand Financial and Banking Industry

In 1997, Asiatic fiscal crisis highlighted the demand for reconstituting debt and fiscal direction, which increases the gross in peculiar legal and accounting houses. The fiscal restructuring required for certain professional services such as amalgamation, acquisitions, and debt aggregation that remained high in 1998, which led to an addition in the sector ‘s employment. i.e. Banks or fiscal establishments need to engage more employees in debt restructuring section. Thailand has 34 commercial Bankss ( 13 are domestic and 21 are foreign ) where foreign Bankss contain of Bank of America, Chase Manhattan, and Citibank, and chief domestic Bankss including Krung Thai Bank, with 646 domestic subdivisions and 10 abroad subdivisions ; Bangkok Bank PCL, with 526 domestic subdivisions and 21 abroad subdivisions ; and Thai Farmers Bank, with 497 domestic subdivisions and 12 abroad subdivisions. After fiscal crisis, authorities put back some domestic Bankss that in fiscal problem for reorganisation and finally denationalization, and 7 out of 15 commercial Bankss were taken into public ownership[ 9 ]. The public fiscal sector comprises Bankss geared for peculiar ground such as 1 ) the Government Savings Bank for little nest eggs sedimentations ; 2 ) the Bank for Agriculture and Agricultural Cooperatives for farm recognition ; 3 ) the Government Housing Bank for middle-and low-income lodging mortgages ; 4 ) the Industrial Finance Corporation of Thailand for industrial development undertakings ; and 5 ) the Export Import bank for importers and exporters. Other fiscal installations consist of finance companies, mortgage loaners, life and non-life insurance companies, and fiscal co-ops.

Krung Thai Bank, one of the Thailand state-owned Bankss that bing before the crisis, took over two of the debatable local Bankss, which with a big sum of non-performance loan ( NPL ) . Different with Bankss in Korea and Malaysia, Bankss in Thailand remained non-performing loans on their record for longer period, which is September of 2000 for about 3 old ages. The governments make a determination to relocate the big part of NPLs from Krung Thai Bank to a authorities plus direction company to rush up the procedure of debt restructuring. Thai denationalizations are more cautious than other such attempts in the part: although foreign Bankss are allowed to keep more than 25 % of a domestic bank ‘s portions, but the maximal bound for the local Bankss ‘ portions hold by alien is non more than 49 % . However, there is non limit for foreign Bankss shareholdings, foreign investors allowed to keep shareholdings above the 49 % bound in foreign Bankss.

2.3.2 Thailand Stock Exchange ( SET )

TheA Stock Exchange of Thailand is the nationalA stock exchangeA ofA Thailand that located inA Bangkok and owned by authorities. The Thai Stock Exchange is instituted in 1962 and was the state ‘s first functionary and lawfully regulated stock market. Yet, the initial established stock exchange is non active and really small trading activity due to limited investor credence of the stock market and weak authorities support, at last it failed in the early seventiess. A private group established a new stock exchange which named as “ Bangkok Stock Exchange ( BSE ) ” or ‘The Securities Exchange of Thailand ‘ , and the first trading of the modernA Stock Exchange of ThailandA began on April 30, 1975. The name was eventually changed to Stock Exchange of ThailandA or SET on the first of January in 1991. The SET is divided into five trading boards: the first board is for local market, and the other boards for foreign, exports, large tonss and etc. The Stock Exchange of Thailand is a legal entity established and run under the Securities Exchange of Thailand Act, B.E. 2517 ( 1974 ) and A the legal model laid down in the Securities and Exchange Act, B.E. 2535 ( 1992 ) . The SET has operated wholly computerized trading since April 1991, through the “ Automated System for the Stock Exchange of Thailand ” , or ASSET, which allows trading to be effectual, indifferent and liquid. Two chief methods of trading are available in the computerized system: Automatic Order Matching ( AOM ) and Put-Through minutess ( PT ) .

Thailand Stock Exchange is sharply in reorganise the structural of stock market to increase the efficiency and transparence. As of 31 December 2011, the Thailand stock marketA provides a set of equity companies and classs merchandises into several specific indexes, which contain of 25 sector indices and 8 industry group indices, it provide more elaborate information sing the fluctuations of peculiar sector and industry. The eight industry group indices include the Agro and Food industry index, the fiscal index and Technology index among others. However, the stableness of Thailand Stock Exchange still confronting challenges from these political events and terrorist events that reduced the investor ‘s assurance over the market. Consequently, it led to irregularly public presentation of the market while these events happened.A Other possible factors that influence the Thai stock market such as the foreign stock index, the value of the Thai tical, oil monetary values, gold monetary values, the MLR and etc. In 2011, Exchange of Thailand had 545 listed companies with a combinedA market capitalizationA ofA Thai BahtA 8,490 billion.

Leave a Reply

Your email address will not be published. Required fields are marked *