S.Korea Softbank, E*Trade JV says to begin in Jan
biz.yahoo.com
SEOUL, Dec 8 (Reuters) - A South Korean online joint venture between Softbank Corp and the E*Trade Group (NasdaqNM:EGRP - news) said on Wednesday it will begin operations in January in a country with the world's highest share of online stock trading.
``We plan to launch online brokerage services as early as next month,' an official with E*Trade Korea told Reuters.
E*Trade Korea obtained a preliminary licence from South Korean financial authorities late last month and final approval is due this month.
Industry sources say financial services in South Korea are moving online faster than those in any other country in Asia.
The Korea Securities Dealers Association says nearly 40 percent of the country's trade in stocks is done online.
Local newspapers said this week that online broking by the country's top five securities companies neared 50 percent of total transactions in November.
That eclipses the 21 to 25 percent penetration rate in the United States, the country at the forefront of the Internet revolution, and dwarfs levels seen in more developed Asian markets like Japan.
Korea has several factors in its favour -- significantly low commission fees, a recovering economy and high Internet usage.
E*Trade Korea expects Korea's market to grow larger and is poised to become a major player within the next few years.
``Definitely, it will take a year or two to get a secure place in the competitive market, but Korea is a big market,' said the E*Trade Korea official.
``Besides, we have Internet giants Softbank and E*Trade on the back of us. That will provide a synergy effect in our business.'
Softbank, headed by billionaire Masayoshi Son, is known for its aggressive investment in about 120 Internet-related firms, mostly in the United States. It owns major stakes in Yahoo! Inc (NasdaqNM:YHOO - news), GeoCities Inc and Internet broker E*Trade Group Inc (NasdaqNM:EGRP - news).
South Korea is just one of several countries where Softbank is investing in order to diversify risk in its hefty investment in Internet-related firms, centred mostly in the United States.
In October, the head of over-the-counter Korea Securities Dealers Automated Quotation (KOSDAQ) Stock Market Inc said Softbank Corp and Nasdaq were seeking a 49 percent stake in the Korean firm.
Local newspapers also reported Softbank sought to establish a financial holding company in Korea.
The main shareholders of E*Trade Korea also include South Korea's LG Investment Trust and Securities with 15 percent.
Softbank holds 40 percent stake and E*Trade Group has 10
percent.
E*Trade Korea will be capitalised at 10 billion won.
|
