NABO Industry Trends and Issues (No. 18)
Published on 28 March 2018
Published by Industry & Employment Analysis Division of the Economic Analysis Bureau
I. Household Income, Real Estate Market, Financial Market and Commodities Market Trends
(Household Income Trend) The monthly average per household (nominal) income for 4Q18 increased by 3.6% YoY as current income including earned income increased by 4.8% YoY. The income quintile share ratio increased x0.86p from the previous year (x4.61) to x5.47 as the income of the bottom quintile households have decreased.
(Real Estate Market Trend) House and apartment prices nationwide have increased by 1.1% and 0.1%, respectively, a lower rate than those of the previous year due to the high housing price increase rate (6.2%) in Seoul despite the new real estate regulations. However, nationwide house and apartment trading volume totaled 856 thousand and 564 thousand units, respectively, approximately 90 thousand and 50 thousand units less than those of the previous year.
(Financial and Commodities Market Trend) While risk indicators decline as the FRB weakened its position regarding benchmark interest rate hikes, the global financial market has exhibited mixed signals regarding interest rates, an increase in stock prices and an overall weakening of major currencies against the dollar.
II. International Comparison of Maternity and Child Welfare in North Korea
If North Korea asks international organizations for humanitarian assistance, such as health and food, they require North Korea to take various measures to ensure the reliability of statistical data. The statistics provided by the international organizations in those fields are therefore considered an accurate reflection of the situation in North Korea. NABO conducted a Principal Component Analysis (PCA) using 14 indicators related to child and maternity protection from the Multiple Indicator Cluster Survey (MICS) results, two of which were reported by North Korea with support from UNICEF in 2009 and 2017. The North Korean maternity and child welfare indices calculated from the two surveys were all ranked in the middle among the surveyed countries. When developing humanitarian aid policies for North Korea, it is necessary to consider the results of international comparison of alternative indicators such as maternity and child welfare indices.
III. Dual-Class Shares in the US and Implications for Korea
Dual-class shares could provide flexible funding schemes for listed companies and be used to protect against hostile M&As, but there is also concern about weakened shareholders’ rights leading to weaker investment or the deterioration of management efficiency. While a dual-class stock system is implemented in the US mainly by start-up firms in the IT sector, discussion is underway on setting safeguards such as a sunset clause in order to minimize any potential side effects.
An empirical analysis conducted on Korea implied that the voting right premium of common stocks have decreased since preferred stock prices have increased against common stock prices over the past 10 years. Nevertheless, there is still a strong tendency to utilize preferred stock or dual-class shares among venture capital firms in the early stage of business, as part of efforts to mitigate the risk of a loss in management rights during the funding process.