Netflix announces plans to invest $2.5 billion in K-content in meeting with Yoon
Netflix announced plans to invest $2.5 billion in K-content over the next four years in a meeting between the company’s CEO Ted Sarandos and President Yoon Suk Yeol in Washington on Monday.
“We’re delighted to confirm our intent to invest $2.5 billion in Korean content, working with the creators from Korean series and films and scripted shows over the next four years,” said Sarandos to Yoon. “This investment plan is twice the amount Netflix has invested in the Korean market since we started there in 2016.”
Yoon said he had a “very meaningful” meeting with Sarandos and other top executives at the Blair House in Washington, in his first public activity as he kicked off his weeklong state visit to the United States.
“We sincerely welcome Netflix’s bold investment decision,” said Yoon, noting that Netflix would invest about 3.3 trillion won in K-content over the next four years, which “will be a massive opportunity for Korea’s content industry, its creators, as well as Netflix.”
“I have no doubt that our investment will strengthen our long-term partnership with Korea and Korea’s creative ecosystem,” said Sarandos. “We are deepening our partnership with the Korean creative industry which has produced amazing hits such as Squid Game, the Glory, Physical 100. With the partnership, we will continue to grow the global industry while sharing the joy of entertainment with Korean storytellers and their fans around the world.”
Sarandos said the streaming service reached the investment decision because of its “great confidence in the Korean content industry,” adding it was also “inspired by the president’s love and strong support for the Korean entertainment industry.”
Noting the worldwide appeal of Korean shows, he said, “Thanks to the Korean creators, their compelling stories, these stories are now at the heart of the global cultural zestiest.”
More than 60 percent of 231 million Netflix subscribers in 190 countries around the world watch Korean content, according to the presidential office.
Earlier Monday, Yoon and first lady Kim Keon-hee arrived on Air Force One at Joint Base Andrews in Maryland to begin their two-legged trip which will also take them to Boston.
They were greeted by officials from the U.S. State Department and White House National Security Council (NSC), including Kurt Campbell, NSC coordinator for the Indo-Pacific.
On Wednesday, Yoon is scheduled to hold a bilateral summit, with U.S. President Joe Biden at the White House, followed by a joint press conference and state dinner.
The two leaders are expected to announce “major deliverables” on ways to strengthen the U.S.’ extended deterrence commitment to South Korea, National Security Advisor Jake Sullivan said in a press briefing Monday, amid the “evolving threat” posed by North Korea.
Yoon and Biden “will announce major deliverables on extended deterrence, on cyber cooperation, on climate mitigation, on foreign assistance, on investment and on strengthening our people-to-people ties,” said Sullivan.
The two leaders in a statement will indicate a “very clear and demonstrable signal of the United States’ credibility when it comes to its extended deterrence commitments” to South Korea, he said.
Sullivan however indicated that the United States opposes the idea of South Korea developing its own nuclear weapons.
He noted that economic and people-to-people ties will be “front and center” during Yoon’s visit, noting South Korea invested over $100 billion dollars in the United States in the past two years, “translating to jobs” across the United States, such as Samsung’s semiconductor fab in Texas, Hyundai’s electronic vehicle factory and new investments by SK in battery plants.
In turn, he noted that South Korea “has stood fast in support of Ukraine since Russia’s brutal invasion over a year ago” and committed to provide over $230 million in humanitarian assistance to Ukraine and joined the international community in implementing sanctions and export controls on Russia.
Sullivan said that Ukraine “is going to be an important topic of conversation” during the summit, adding that the leaders “will have a chance to talk about the military situation on the ground there.”
He added that the summit “is going to meet the very high expectations that both publics have from it” as the two sides “are reaching a new level in strength of the U.S.-ROK [Republic of Korea] alliance.”
The presidential couple also attended a dinner banquet with overseas Korean compatriots later Monday.
During the meeting, Yoon highlighted the significance of the Korean community in America and their role in strengthening bilateral ties.
BY SARAH KIM [email@example.com]
GM, POSCO Future M to boost investment at battery materials plant in Canada – The Globe and Mail
General Motors Co GM-N and South Korea’s POSCO Future M said on Friday they will invest more to boost production at their chemical battery materials facility in Canada, taking their estimated total investment in the plant to over $1-billion.
The companies said the new investment includes an additional CAM and a precursor facility for local on-site processing of critical minerals.
The development comes a few days after the Canada’s federal government and the Quebec province each provided about C$150-million ($112-million) for the facility.
The companies last year established Ultium CAM joint venture, which is majority owned by POSCO Future M, and had initially invested about $327-million, according to media reports.
Their battery facility in Becancour, Quebec, will produce cathode active material (CAM) for electric vehicle (EV) batteries.
Canadian pension fund CDPQ puts brakes on China investment, Financial Times reports – Reuters
June 1 (Reuters) – Canada’s second-largest pension fund Caisse de dépôt et placement du Québec (CDPQ) has stopped making private deals in China and will close its Shanghai office this year, the Financial Times reported on Thursday, citing people familiar with the matter.
The news follows a May 8 parliamentary hearing in which several Canadian pensions, including CDPQ, were asked about their relationship with China as bilateral political tensions have intensified.
CDPQ is leading its regional investment efforts from Singapore, the report said, noting that it still has business interests in China.
“We paused private investments for some time already — and have focused on liquid markets, which is the majority of our two per cent total portfolio exposure to China. We expect this trend to continue,” the newspaper quoted CDPQ as saying in a statement.
CDPQ confirmed the Shanghai office closure later this year, but declined to comment further.
The Financial Times in February reported that Singapore’s sovereign wealth fund GIC has reduced private investments in China.
During the May hearing, Michel Leduc, a senior manager at the Canada Pension Plan Investment Board (CPPIB), said China was an “important source” for its portfolio.
“We recognize that any investment in China needs to be handled with care, sophistication, and an acute understanding of the current political and geopolitical environment,” Leduc said.
A CPPIB spokesperson declined to comment further on Thursday.
In May, Canada’s C$211.1 billion ($157.87 billion) British Columbia Investment Management Corporation (BCI) said it had reduced exposure in China and Hong Kong by about 15% over two years and paused direct investments in China.
“Our current exposure in China is less than 5% of the overall BCI portfolio, the majority of which is through public markets and via indexed funds,” the asset manager said.
In April Canada’s third largest pension fund, Ontario Teachers’ Pension Plan (OTPP), also closed its China public equity investment team based in Hong Kong.
At the start of the year, OTPP said it was pausing future direct investments in private assets in China, citing geopolitical risk as a factor.
OTPP expects to name a new head of Asia-Pacific Private Capital Direct in the coming months to replace Raju Ruparelia who has left to pursue other opportunities, a spokesperson said by email.
($1 = 1.3372 Canadian dollars)
Our Standards: The Thomson Reuters Trust Principles.
Why Canada would benefit from 'direct index' investing – The Globe and Mail
Traditionally reserved for institutions and ultra-high net worth individuals, direct indexing is a hot topic for investors as technology advances and downward pressure on retail trading commissions have done much to democratize its access. In the United States, direct indexing strategies are expected to outpace the growth of both ETFs and mutual funds. In response, U.S.-based providers are scrambling to build, buy or partner to acquire the required capabilities to get in on the action, driving down the costs and required account minimums for investors. For Canadians, it’s worth getting a better understanding on what Direct Indexing is, and what we can expect for the future of these strategies north of the border.
As a brief overview, direct indexing amounts to personalization at scale. Similar to a traditional investment fund, direct indexing gives individual investors a way to get exposure to a broad segment of the investment market, such as an equity index. Unlike traditional funds, however, direct indexing involves individuals investing directly in the underlying securities (stocks or bonds that make up a larger index), instead of simply buying units of a fund. Investing in this way offers multiple benefits. First, there are a variety of tax strategies (most notably tax loss harvesting) made available by directly holding the individual securities, which can add a potential 1-3% after-tax return on an annual basis. Second, the investor would have near-full autonomy to incorporate their personal preferences for the purpose of excluding securities that do not align with their values or investment objectives. Consider an index that is made up of the 500 largest companies listed in the United States, when investing in this product the investor does not have the choice of what companies make up this portfolio, meaning they may be required to invest in companies that do not align with their values or investment objectives. However, by holding the underlying securities, these non-aligned stocks can be excluded from the investor’s portfolio. While traditional thematic ETFs and mutual funds provide generic options for investor choice, the opportunities for hyper-personalization inherent in direct indexing strategies are almost endless.
As a concept, direct indexing is not new. Sophisticated investors, such as institutions and wealthy investors, have long held the requisite buying power and influence to overlay all manners of unique constraints on their investment portfolios. However, technology advances that could handle significant scale coupled with reduced trading costs brought this concept into the hands of individual investors – the former made it possible for investment managers to offer direct indexing while the latter made it affordable for the retail market.
The seismic nature of this shift cannot be undersold. Consider an investment advisor seeking to satisfy the individual needs of their clients across 10,000 individual investment portfolios. They’d need to manually ingest a mountain of client-level information, go about buying into hundreds of thousands of individual securities and monitor all accounts to identify portfolios that require rebalancing when they drift out of alignment. Prior to the advances described above, this would be cost- and time-prohibitive. Direct indexing offers this high degree of personalization in an automated fashion that is feasible for the investment manager, while better serving individual client needs.
When compared to the U.S., Canada has been slower to internalize the required pre-conditions to support direct indexing, but the outlook is increasingly positive. Leading direct indexing technology-solution providers in the U.S. are expressing interest in Canada as an expansion target. Additionally, Canadian broker-dealers are exploring ways to enable zero commission trading at scale. Fractional shares, at one time considered more of a marketing gimmick, is also slowly finding its footing as firms are tapping into lower account balance investors that are seeking alternatives to traditional funds.
Beyond these structural considerations, it’s worth examining whether demand among Canadian investors will be sufficient to justify bringing direct indexing to the Canadian market. For instance, the main driver for adoption of direct indexing in the U.S. is the opportunity to capture additional after-tax returns through direct indexing’s optimization capabilities. However, given tax code differences in Canada related to the treatment of capital gains, the benefit provided from tax optimization strategies deployed on Canadian portfolios will likely be less than those experienced by our counterparts south of the border. That said, believers in the concept remain steadfast that the increase in personalization for Canadian investors will be enough to drive demand for direct indexing.
Direct indexing likely still has a place in the Canadian investment landscape, despite the differences between Canada and the U.S.. The first ‘Canadianized’ direct indexing solution made available to the mass-market will have to navigate Canada’s structural nuances; if done successfully, investors aim to significantly benefit by accessing institutional investment capabilities at a cost likely competitive with most Canadian mutual funds.
Michael Thomson is director, and Jeffrey Joynt a consultant, with Alpha Financial Markets Consulting
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