South Korea’s benchmark Kospi index hit a three-year high this week on the prospect of rising dividends after the government announced tax measures aimed at unlocking billions of dollars in corporate cash reserves. It also unveiled a $40bn stimulus package to boost the country’s flagging economy as Choi Kyung-hwan, the new finance minister, promised to introduce expansionary fiscal policy. Continue reading »
South Korean carmakers are up in arms over Chile’s proposed bill to impose an environment tax on diesel vehicles, which is likely to hit Korea’s car exports to the Latin American country and cause diplomatic friction.
Chile is one of the key export markets for Korean automakers such as Hyundai Motor and its affilate Kia Motors, both making rapid inroads into emerging markets. Korean cars are the best-selling imported vehicles in Chile, with 30 per cent of the country’s fast-growing auto market. Continue reading »
South Korean companies, notorious for their insensitivity towards shareholder value, may be incentivised to boost dividends.
The finance ministry said on Tuesday that it is seeking ways to funnel bigger proportions of huge corporate cash reserves into the broader economy as growth in Asia’s fourth-largest economy stalls due to weak domestic consumption with many households plagued by heavy debts. Continue reading »
Samsung’s smartphones may be losing popularity in China as lower-cost Chinese rivals such as Xiaomi and Lenovo steal a march on the Korean company in the budget segment, but they appear to be coveted in Brazil.
Samsung said on Tuesday its factory near Sao Paulo was attacked by about 20 heavily-armed bandits early on Monday and its workers there were held hostage while truckloads of smartphones, tablets and notebook computers worth about $6.3m were looted.
The robbery – which was played out with B-movie flourishes against a backdrop of the World Cup – would not be a huge financial hit for Samsung with its $60bn cash pile but the theft could ring alarm bells for the world’s largest smartphone maker – which has factories all over the world. Continue reading »
South Korea’s stock exchange opened a gold trading platform on Monday with the hope of boosting transparency of gold trades and rooting out shady deals used for tax evasion.
Eight brokerages and 49 dealers were allowed to participate in the market. They will get tax benefits to encourage their active participation and they will be exempted from trading commissions temporarily until March 2015. Importers of gold to be traded on the exchange will also be exempted from tariffs to increase supply. Continue reading »
Oh no, Hyundai Motor has overstated its fuel-mileage figures again. This might be the last thing the South Korean carmaker needs after the company agreed to pay compensation last year for exaggerating its mileage numbers for more than 1m autos sold in the US.
Yet on Monday, Hyundai was expressing “regret” for more over-hyped fuel efficiency claims. Continue reading »
It’s been a tough year so far for Hyundai Motor. Following the stronger won (eroding competitiveness) and labour problems, the South Korean carmaker now has to deal with brake problems.
Hyundai said on Tuesday it would recall about 27,500 Genesis sedans to replace the brake fluid, which does not have a corrosion inhibitor, as the problem could cause braking failure. The recall affects the luxury sedans produced between April 2008 and March 2012. Continue reading »
Kim Choong-soo: still optimistic
At a time of growing external uncertainties, economic projections seem a touch meaningless.
Still, the Bank of Korea on Thursday cut its growth forecast for next year to 3.8 per cent from its July estimate of 4.0 per cent, citing increasing “downside risks” from the US fiscal impasse. The Bank also held interest rates steady at 2.5 per cent, as expected. Continue reading »
South Korea’s industrial output hit a nine-month high, adding to investor confidence in the country’s recovery. But not everything is rosy about Asia’s fourth-largest economy amid growing concerns over corporate financing problems. Continue reading »
Can North Korea’s Kaesong become an internationally competitive industrial park on the back of its ultra-cheap labour? Probably not. But at least its backers are trying. Seoul’s unification ministry in charge of inter-Korean relations said on Wednesday the two Koreas will hold a business fair at the North Korean border town in October to attract foreign investment, after they agreed to reopen the complex next Monday. Continue reading »
Wedesday’s fire in SK Hynix‘s plant in China is a big setback for the South Korean company – but it may prove to be a fillip for the D-Ram industry, as the blaze will reduce chip output and boost chip prices in the short term. Continue reading »
Can North Korea’s Kaesong industrial park attract foreign investors, given its lack of appeal to South Korean ones? Apparently not. Seoul’s unification ministry in charge of inter-Korean relations said on Wednesday that Swedish furniture maker Ikea had turned down a request from Seoul to set up a plant in the North Korean border city. Continue reading »
South Korea has announced it plans to set up a gold exchange in 2014 to much fanfare – but analysts warned that it might be poorly timed, given weak demand for bullion amid the global economic slowdown.
The country’s financial watchdog said on Monday that spot gold will be traded on its main bourse from early next year as the government is keen to boost transparency of gold trades and root out shady deals used for tax evasion. Continue reading »
Recent investigations into irregular business practices at South Korea’s Nonghyup Bank underline the challenges that financial regulators face in ferreting out unfair business deals between affiliates of the country’s big financial groups.
The Financial Supervisory Service said on Wednesday it had discovered through a special inspection that Nonghyup extended a loan of Won6.35tn ($5.7bn) to its parent National Agricultural Cooperative Federation in March last year and offered some of the loan at lower interest rates as a favour. Continue reading »
The weaker yen and the deteriorating diplomatic relations are taking their toll on Japan’s investment in South Korea, government data showed on Monday.
Along with the yen’s weakness the strained bilateral relations with South Korea cut Japan’s pledged FDI in South Korea by 48.6 per cent to $1.36bn in the first six months of this year. Are there any bright spots for Korea? Continue reading »