“My view of the Korean market remains positive for the next several months since the
Korean government is proactively implementing market-boosting measures. I expect
the domestic institutions and individual investors who have been on the sell side will
return to the market soon”. Henry Seggerman is the president of International
Investment Advisers. The headquarters is located in New York and the company
focuses its investment in the Korean market only. Mr. Seggerman forecasted that the
Korean market will rally in 4Q of this year. A similar situation to the 2001 Korean
market rally, which occurred back-to-back with the domestic recovery while the global
economy was suffering, expected to reappear in this quarter.

Henry Seggerman manages Korea International Investment Funds with the size of 50
million dollars. The company has an Investment Advisory License issued by the Korea
Financial Supervisory Service (FSS) and has a location in Seoul as well.

When asked why his company invests solely in the Korean market, his response to the
question was that the company’s founder raised funds from America and Europe and
invested solely in Japan during 1960~70 and the success was huge at that time. Since
Korea had similar economic pattern and conditions, he believed that the Korean market
had great potential and launched the Korean Investment Fund in 1992,
Henry Seggerman shared some of his views on the Korean economy with us. He
stated that domestic demand would not get worse at this point. On the other hand, it has
much potential for improvement. Unlike other Asian countries, he thinks that Korea
has room for fiscal spending as well as additional interest rate cuts, which are positive
for the domestic demand.

Korea International Investment Fund has outperformed the KOSPI by 250% over the
past 12 years. Mr. Seggerman said long-term investment based on fundamentals was
the reason for the great performance. As far as stock selection is concerned, the
company focuses on the growth and value at the same time. He also added that the
fund has also been investing in KOSDAQ for the past eight years.

Korea International Investment Funds’ major clients are mainly long-term investors.
Thus, there has been no substantial change in the fund size over the last 12 years. He
emphasized that, because the company’s investment strategy is based on the
fundamental and valuation regardless of the fluctuation in the market, Korea is still
attractive in this aspect.

He pointed out three problems holding back the stock market: the lack of flexibility of
labor market, low equity investment weighting of pension funds, and the double taxation
on the dividends. He added that currently Hong Kong market is trading at 15x PE and
where as Korea is trading at 7x PE. If these three problems are solved, the Korean
market’s valuation will definitely be increased.

Kwon, Sung-Hee, Money Today, 2004.09.13