Foreign investors who helped South Korea weather the 1997 to 1998 Asian financial crisis may have worn out their welcome as the country struggles to handle a stubborn economic downturn.
But rising nationalism rather than falling bottom lines may have more to do with recent developments, including indications that financial regulators are seeking ways to limit the power of foreign investors, especially in the sensitive banking sector.
The 1997 to 1998 economic meltdown prompted South Korea to undergo dramatic market liberalization and deregulation. Many debt-stricken firms were bailed out with state money and then sold to foreign investors who poured into the country with much-welcome cash.
At the time, foreign capital was desperately courted and played a key role in helping South Korea to ride out the financial storm.
But times have changed. Six years later, foreign investors are no longer welcomed with open arms. They are regarded with suspicion in some quarters and their activities viewed as no longer coinciding with the interests of Korea Inc.
"Foreign investors who once received warm treatment here are now seen differently, with some people pointing to their harmful effects on our market," said Goodmorning Shinhan Securities' Kim Hak-kyun.
Foreigners now control 43 percent of South Korean stocks, up from 40.7 percent a year ago.
"The high ratio of foreign stock ownership means South Korea stocks are relatively cheap," Kim said.
He estimates income foreigners earned from stock dividends this year will rise sharply to an all-time high of four trillion won (US$3.8 billion) from 2.9 trillion won last year.
Responding to concerns about an outflow of national wealth, the Financial Supervisory Service (FSS) has floated the idea of limiting the number of foreigners allowed on the boards of domestic banks.
"We believe banks must be run by experts who have good understanding about our banking system and environment, regardless of their nationality," a senior FSS official said.
The move followed an onslaught on US equity fund Lone Star.
Spec Watch Korea, founded by progressive professors, union activists and civic groups in August to monitor the movement of foreign funds, mobilized 5,500 people to support their push in October to get the government to retract its earlier decision to endorse Lone Star's acquisition of Korea Exchange Bank, the country's fifth largest lender, a year ago.
Foreign investors say the move reflects nationalist anguish in Asia's fourth largest economy that has been grappling with a hangover from a consumer spending binge. Activists say their action is defensive, seeking to keep hot money away from national treasures.
Many analysts and financial officials say foreign capital is positive for the country, making local firms more transparent.
Spec Watch, however, wants strict institutional measures to stop the banking system from falling into the hands of foreign investors.
Spec Watch's coordinator Jeong Jong-nam said his group opposes speculative funds as a "public enemy encroaching on the public interest in the name of the maximization of shareholders' profit."
Its surveillance has focused on US funds which control Korea Exchange Bank, Korea First Bank and Koram Bank as well as Sovereign Asset Management.
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