Goldman Sachs Sees Four Percent 1999 S. Korea Growth
SEOUL, March 18, 1999 (Reuters) - South Korea should see economic growth of more than four percent in 1999, above the Seoul government's projections of two percent or more, a senior official at Goldman Sachs said on Thursday.
"A plus four percent (economic) growth rate is projected for Korea in 1999, about a ten percent swing from the minus six percent in 1998," Philip D. Murphy, president and managing director of Goldman Sachs Asia, told a news conference.
"That's about as substantial a swing that we'll probably see in Asia," he said.
Murphy said the growth projection depended on continued restructuring in the corporate and financial sector, as well as outside factors such as the performance of the Japanese and U.S. economies and global trade.
"A substantial part of investment which has flowed into Korea so far has its basis in the country's restructuring story," he said.
Jon Corzine, co-chairman and senior partner of Goldman Sachs, said this was one of the major reasons why the U.S.-based investment bank decided to upgrade its representative office in Korea into a fully licensed branch office as of March 18.
"I have tremendous respect for the government and people of South Korea concerning their efforts in economic recovery," Corzine said. "Any time you have a strong, growing economy, you see plenty of opportunities for investment banks."
Goldman Sachs has already shown interest in Korean bad debts. It purchased 208 billion won worth of collateralised non-performing loans for 25.5 billion from state-run Korea Asset Management Corp (KAMCO) in October last year.
KAMCO has been designated to purchase for re-sale non-performing loans and real estate from the country's troubled financial institutions.
Murphy said Goldman Sachs' Korean branch was expected to focus more on the Korean equities market.
Tommy Jinsuk Oh, managing director of Goldman Sach's Korean branch, said he did not expect returns inthe fixed income market to be as high this year as last.
"I'm sure many investors enjoyed as much as 40 percent gains -- which was quite unusual -- due to the interest rate and the currency gains," Oh said. "The popularity of the fixed income market will not be as high as inthe last twelve months."
Copyright © 1999 Reuters Limited. All rights reserved.
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