Hangjeong Gongjehoe Loads Ammunition... Aiming for the First Half of Next Year

[Asia Economy Reporter Park So-yeon] The Korea Local Government Officials Mutual Aid Association has loaded approximately 1 trillion won worth of ammunition. This is to prepare for economic uncertainties and secure investment funds.

According to the investment banking (IB) industry on the 28th, the Mutual Aid Association currently has nearly 1 trillion won in investment reserves. A senior official from the Mutual Aid Association stated, "We plan to minimize fund disbursement within this year," adding, "We expect opportunities to arise in the first half of next year."

He forecasted that the financial market will go through four stages: financial market shock, mechanical rebound, liquidity crunch, and restructuring, interpreting that the current Korean economy is in the liquidity crunch phase. Contrary to rumors that institutions' coffers are empty, they are observing market sentiment while aiming for investment opportunities in the first half of next year.

The official said, "We expect interest rates to peak in the first half of next year and are monitoring the timing for investment," adding, "We anticipate that stock prices will hit their lowest point during the restructuring phase in the first half of next year."

Institutions are currently liquidating assets to accumulate cash. Following the liquidation of overseas stocks and bonds last year, this year they are also liquidating domestic real estate. Institutional investors such as pension funds and mutual aid associations sold buildings worth more than 2 trillion won in the third quarter alone to raise cash. The National Pension Service sold the Seoul City Tower, which it held through Koramco Asset Trust REITs, to the global private equity firm Kohlberg Kravis Roberts (KKR) for 490.1 billion won in July this year.

The Ire Building, in which the Teachers' Mutual Aid Association, The-K Life Insurance, and the Credit Union participated as major investors, was sold for 307.5 billion won around the same time. Jongno Place, held by the Private School Teachers' Pension, the Mutual Aid Association, and Lotte Insurance, was sold to Samsung Fire & Marine Insurance for around 330 billion won. The sale of Asterium Yongsan, owned by the Military Mutual Aid Association, is reportedly in its final stages. While securing cash through asset sales, institutions are also minimizing the extension of matured funds.

Song Doo-han, Deputy Director of the Minjoo Research Institute, warned, "Around the first half of next year, when interest rates are expected to peak, there is a high possibility of a major crisis in the financial market," adding, "Signs such as stock market crashes due to capital outflows, sharp rises in exchange rates, and a downturn cycle in the real estate market signal the risk of a financial crisis, requiring thorough preparation by the government and financial institutions."

This content was produced with the assistance of AI translation services.