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  Korea Report - October 2008
  Author : Hwang & Co     Date : 08-11-11 09:23     Hit : 42837    
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                      Let There Be a Yard

After the completion of the first edition of the book, the author and the publisher could not reach an agreement about several corrections to the book, such as the arrangement of the book and the clearer identification of the titles of episodes in the contents page.

The publisher agreed instead to return the rights of publication of the book to the author. The book has been re-edited under the name of ¡°Let There Be a Yard¡± instead of ¡°Let There Be a Shipyard¡± by kind arrangement of the new publisher, E&B Plus in Seoul.

You may order the book in following manner.
Contact address :
E&B Plus
95-3 Sangsu-dong Mapo-ku,
Seoul Korea.
Tel : +82 2 3272-3270, 3290
Fax : +82 2 3272-3280
e-mail : archie710@hotmail.com

Price : USD25.00 per book.
Discount : 10% for 50 or more copies in order.
Shipping & Handling charges : to be added.

The author now hopes the story will be easier to follow and more pleasurable for readers.

        +++++++++++++++++++++++++++++++++++++++++++++++++

                      Korea Report – October, 2008.

Topics
-President Lee reaffirmed not to slow down economic reform because of economic crisis.
-USA & Korea agreed visa waiver program.
-Korea & Japan agreed to resume bilateral summit.
-Government decided to freeze the pay of public sector as well as banks.
-USA removed NK from its terrorism blacklist.
-USA reiterated to maintain current level of forces in Korea.
-Paper bomb made NK scary.
-Contingency plan for the NK.
-Economy growth rate sharply cut.
-Government announced a package of measures to stabilize financial market, to provide liquidity to SMEs and to ease the trouble in construction industry.
-BOK made rate cut by 1% in a month.
-13 Asian leaders agreed to create an $80 bil fund.
-Korea & USA agreed to set up a $30 bil currency swap line.
-Global credit crunch hit Korean shipbuilders.
-KOSPI hit 938 at bottom, and KWon reach 1439 against USD to top
-KDB picked HanHwa as preferred bidder for a 50.4% stake in DSME.
-C&Group in trouble.

GOVERNMENT AND SOCIETY

President Lee Myung-bak reaffirmed that the looming economic crisis should not be allowed to slow economic reforms aimed to enhance the nation's growth potential. The government is ready to take additional measures to calm financial markets and minimize the global slowdown's impact. He stressed the need for labor-management peace as companies will have to tighten their belts to ride out a stagnant economy. The government has decided to freeze salaries for public servants this year, which will likely be extended next year. As exports are expected to suffer from the sluggish world markets, Lee said the government will focus on invigorating domestic demand.

US President George W. Bush announced SKorea's entry into the Visa Waiver Program, which allows Korean citizens to stay in USA for up to 90 days without visas, and vice versa. SKorea is among 7 countries to join the program, which already has 27 member states. SKorea in Aug began issuing electronic passports as a precondition for entry into the program. The program will likely take effect in mid-Nov, when Seoul and Washington sign an agreement on crime and terrorism prevention. Bush and Lee agreed in April to implement the VWP by the end of the year. The government formally approved a deal with USA on exchanging the criminal records of visitors, a measure required for Korea to join the US VWP.
US beef imports surged in Sept, fueled by consumer demand for premium sirloin and rib cuts. In terms of total value, US beef accounted for 43% of all imports. SKorea imported 20,253 tons of beef worth $103.13 mil last month. SKorea was rocked by massive nationwide protests after Seoul agreed to lift the long-standing ban on US beef on April 18 this year. Imports of Australian beef, which has been the best-seller in the absence of US beef, fell to 10,501 tons worth $49.47 mil in Sept, still representing about 50% of all imports, but being lowered than the 70% market share they enjoyed in May.
Japan¡¯s new Prime Minister Taro Aso vowed to watch his language and apologized for making unguarded remarks in the past in an apparent reference to previous controversial comments on wartime history. He acknowledged that Japan through its colonial rule and aggression caused tremendous damage and suffering to the people of many countries, particularly to Asian nations. In 2003, Aso said that Koreans willingly adopted Japanese names during Japan¡¯s 1910-1945 colonial rule of the Korean peninsula and said in 2006 that Japanese colonizers helped raise the level of education in Taiwan when they occupied the island during 1895-1945.
President Lee and Japanese PM Taro Aso agreed to resume bilateral shuttle summit diplomacy, suspended following the outbreak of bilateral territorial and historical conflicts earlier this year. They also agreed to push a 3-way summit involving China in Japan in mid-Dec to intensify regional efforts to fight the global financial crisis and to discuss issues involving NK's nuclear program. They held their first summit talks on the sidelines of the Asia-Europe Meeting in Beijing.

The PM of Korea and Mongolia signed a MOU on the cooperation during their talks in Seoul, allowing Korean companies to participate in Mongolian energy projects. 2 premiers agreed to write a common mid-term action plan to improve their countries' relations to a "good-neighbor partnership" as agreed in a 2006 summit. Korea is a major investor in Mongolia, importing large amounts of gold, copper and other minerals. Mongolia is one of the world's 10 richest countries in terms of resources, with abundant coal, copper, tungsten and other raw materials. 2-way trade stood at $126 mil as of 2005, up from $500,000 in 1990, when they first established diplomatic ties.
Korea and France signed a the deal on the "working holiday" program that provides both Korean and French youngsters aged 18-30 with a legal opportunity to find jobs in partner countries for up to one year while traveling there. France is the fifth country that Korea has signed for the same program, following Australia, Canada, Japan and New Zealand.
During the ninth world congress of the Metropolis in Sydney, Seoul was named the host of the Asian arm of its Montreal-based training institute. Asian members of the World Association of 104 major metropolises, will send public service managers and their staff to Seoul for learning in municipal management. The official opening ceremony of the Seoul center is scheduled for March next year.

The government plans to freeze the pay of public sector employees next year as the nation braces for an economic slump. Some public corporations, under mounting public pressure, have already decided to cut the pay of executives. The Korea Exchange will cut executives' pay drastically by 20%, considering the slump in the local stock market, and introduce other belt-tightening measures. The proposed new wage guideline could be applied to 260,000 employees at some 300 public corporations. Prime Minister called for a wage freeze on employees of public corporations as part of efforts to streamline the public sector.

Choi Jin-sil, Korea's long-beloved iconic actress committed suicide amid rumors accusing her of involvement in the alleged suicide last month of another actor. Choi, 39, was found hanging in the shower stall in her room with a bandage tightened around her neck. Choi is rumored to have lent about KW2.5 bil ($2.1 mil) to and then black mailed Ahn Jae-hwan, a renowned actor and husband of Choi's close friend, comedienne Jung Sun-hee. Ahn was found dead on Sept 8 in his minivan in Seoul. Ahn was said to have seriously agonized over snowballing debts from his series of moribund businesses. Choi went to the police station herself and asked the police to track down the one who disseminated the rumors against her, by spreading the rumors on the internet. As the suicide of a star actress is sounding alarm bells on malicious online rumor-mongering, the government is moving to enforce even tougher rules on messages posted on the internet, and will expand the verification system whereby users who post comments on websites are required to use their resident registration numbers.
The Sunple Movement, a private organization devoted to promoting a healthier internet culture, has designated Nov 7 as "Sunple Day," dedicated to raising awareness of online manners. The group has plans for various on- and off-line campaigns to celebrate the day, with students from some 20 schools, launching a campaign to post kind replies to web postings. The organization will also start a petition to collect 1 million signatures promoting "sunple," coined from the words "sun" meaning "good" or "kind" in Korean, and "ple," which is short for "reply."

Cabinet meeting passed a bill to allow hospitals to attract foreign patients. With the introduction of the revised bill, a doctor with multiple medical licenses, both of oriental doctor¡¯s and physician's license, will be able to perform all of practices at the same medical institution. The ministry will develop marketing approaches and strategies for each country, including USA and China, aiming to draw 100,000 foreign medical tourists by 2012.
9 vocational high schools across the nation have been chosen to receive a total of KW14 bil ($11.4 mil) over the next 3-4 years to better foster industrial technicians. The selected schools will be called "meister schools," which will newly open in March 2010. The 9 high schools fostering technicians for shipbuilding, automobile, semi conductor, steel, electronics, machinery, energy-related industries or medical equipment were chosen based on their curriculum and plans for student employment. All meister schools are to send students for on-the-job training at major industrial production sites nearby or the students' future workplaces. The supporting industrial players include big-name companies such as Korea Electric Power, Renault Samsung Motor, Hynix Semiconductor, Hyundai Steel, HHI, Doosan Infracore and SHI.
Korea plans to spend KW40 bil (US$29.8 mil) in 2009 to attract foreign schools and research institutes to the country's free economic zones. The Salt Institute, a research body focusing on human stem cells, has established a biosciences research center in Incheon, while NCSU is in the process of building a biology laboratory in the city. Under a long-term plan, Seoul aims to attract at least 5 foreign universities and 10 high-tech laboratories to the FEZs.

The Constitutional Court ruled that the law criminalizing extramarital sexual affairs is constitutional, its fourth ruling upholding the decades-old law. The penal code in Korea defines adultery as a crime punishable by up to 2 years behind bars, but the law is applicable only when a spouse files a suit on the premise. A high-profile adultery case, involving Oak So-ri and Park Cheol, both well-known TV personalities, has reignited the decades-old debate on the law. Oak was indicted in Jan on the charges that she had indecent affairs with a man in 2006, but immediately filed a petition, challenging the law.
The Supreme Court affirmed a 10 year prison sentence for a 70 year old man charged with setting fire to Namdaemun, a 600 year old gate and the nation¡¯s No1 national treasure. A district court highlighted the crime inflicting ¡°indescribable mental pain on the Korean people¡± and caused the ¡°nation¡¯s fallen prestige.¡±

In-Kyung Kim, another Pak Seri kid, wrapped up her first LPGA Tour victory. The 20-year-old Korean took a 3-stroke victory over Angela Stanford in the Longs Drugs Challenge, earning $180,000. Last season as a rookie, Kim lost to Ochoa in a playoff in the Wegmans LPGA. Kim has 6 top-10 finishes this year.
Kim Yu-na, the 18-year-old Korean figure skating star, pulled off a series of near-perfect jumps and an eloquent spiral sequence to win the free skate at the Skate America in USA, claiming the women's title at the opening event of the Grand Prix series. Kim skated to the rhythm of Scheherazade, composed by Nikolai Rimsky-Korsakov. The awarded her the first women's title of the 2008-2009 season.
SKorea took 4-1 victory over the UAE at home in an Asian qualifier for the 2010 World Cup. The win at Seoul World Cup Stadium put SKorea firmly back in contention for a ticket to the World Cup finals in Asian Group 2.

NORTH KOREA AND NATIONAL DEFENSE

USA removed NK from its terrorism blacklist on Oct 11 in a major breakthrough on denuclearization, as Pyongyang had agreed to verification of all of its nuclear programs, including the suspected uranium-based nuclear program, nuclear proliferation and its plutonium-producing facilities. NK decided to resume the disablement of nuclear facilities in Yongbyon and allow inspectors of USA and IAEA to perform their duties. The deal, however, would be a significant retreat from US original proposal, in which Washington demanded unlimited, free access to the sites for verification.
The 6-party disarmament talks stalled as Washington and Pyongyang disagreed over details of a verification protocol to check the North's nuclear list, submitted in June. The North has recently backtracked on its pledge to dismantle the main nuclear facilities in Yongbyon, citing the US failure to remove NK from its terrorism blacklist. Under a 2007 deal, NK pledged to disable its nuclear program in return for 1 million tons of heavy fuel oil or equivalent assistance in addition to the normalization of ties with Washington and Tokyo. Under a subsequent pact, Washington suggested it would take Pyongyang off the terrorism list in exchange for NK providing a "complete and correct" declaration of all of its nuclear programs. Washington and Pyongyang have agreed that investigators would have access to all declared nuclear facilities and also to undeclared sites based on "mutual consent." The North has opposed inspection, saying they are military installations unrelated to its development of nuclear weapons.
Participating nations of 6-way talks will finalize and endorse the verification agreement and discuss how to wrap up the second phase of the 3-tier denuclearization. So far, 8 out of 11 disablement steps have been completed, under a 2007 denuclearization-for-aid deal.
The US decision to remove NK from a terrorism blacklist, despite Pyongyang's refusal to fully account for the fate of Japanese civilians it kidnapped in the 1970s and 1980s, has angered Japan. Japanese PM Taro Aso publicly criticized the move and spoke against providing any aid to NK unless the abductees issue was resolved.

NK is possibly preparing to fire up to 10 more missiles in addition to 2 short-range ones it fired early Oct into the West Sea. SKorean and US surveillance systems have detected signs that the North is gearing up to fire more missiles as part of a training session. It fired 3 such missiles in March and May this year. The missile test comes as the North struggles to get removed from Washington's list of terrorism-sponsoring nations. Pyongyang has habitually exploited its missile systems to get its point across to Washington, Seoul and possibly other members of the 6-party talks. In Oct 2006, it conducted its first nuclear test.
Israel has accused NK of covertly supplying at least half a dozen Mideast countries with nuclear technology or conventional arms, through black market and convert network channels. According to US officials and outside experts, NK has sold its military goods to at least 18 countries, mainly in Africa and the Middle East and in mostly convert transactions. NK¡¯s catalog has included ballistic missiles and related components, mobile rocket launchers, and nuclear technology.

OAO Russian Railways, the operator of the world¡¯s longest rail network, began renovating the NKorean rail link to help Russia secure a new export corridor between Europe and East Asia. Work started on a 52 km section of track to the Russian border and on construction of a container terminal at the NKorean port of Rajin. The company plans to spend 140 mil euros ($199 mil) to link the Korean peninsula to the EU via the Trans-Siberian Railroad. Should 2 Koreas are connected, the link may be extended to the manufacturing centers in the South. The plan originated in 2001, when NKorean leader Kim traveled by rail to Moscow to visit then-President Vladimir Putin.

Plans to build the Pyeongtaek military base where the US armed forces will be relocating is expected to be pushed back by as much as 7 years to 2019 from the original 2012 deadline, which is coincided when Seoul receives wartime operational control from Washington. Washington is calling for the 2019 deadline, while Seoul supports an earlier 2014 time frame. Washington estimates the total relocation costs over KW13 tril ($9.9 bil), up from the originally expected KW8 tril. Seoul also expects costs to rise. The USFK faces problems as its parliament made them difficult to meet the $600 mil per year to cover the necessary costs until 2012. The US Congress has agreed to an annual $300 mil.
The commander of USFK reiterated USA will maintain the current level of forces at 28,500 troops in SKorea after Seoul's retaking of wartime command over its troops from USA in 2012. President Lee and US President Bush agreed in April to maintain the current US troop level, although Lee's liberal predecessor Roh pushed ahead with the gradual reduction of US troops to 25,000 in coming years.
SKorea and the US marine will hold a major joint military landing exercise during Oct 30 - Nov 8, involving more than 8,000 Marines and scores of vessels and aircraft. The drill could further sour relations between South and North Korea, which regularly denounces such joint exercises as preparations for an invasion of the NK. It will involve 27 naval ships, more than 30 helicopters and about 70 amphibious landing vehicles.

A blimp filled with propaganda leaflets lifts off from a boat on the waters near western border line, headed for NKorean soil, by civic groups and organizations formed by NKorean refugees. 2 Koreas agreed to completely stop the practice in 2004, but local civic groups remain committed to their distribution. The North considers the pamphlets as a 'paper bomb,' because the leadership is desperate to keep away anything that is criticizing the government, not to mention the people who are all affected by the fallout of Kim Jong-il's illness and ensuing political troubles, and of course financial hardship. Pyongyang has requested 2 working-level military talks in Oct after a 9-month hiatus, only to use both meetings as opportunities to grill Seoul about the propaganda pamphlets. The North has even threatened to deny or limit access to the military demarcation line, and has warned of negative impacts on the SKorean tours to Gaeseong City and the operation of the inter-Korean industrial complex there. Seoul's Unification Ministry had asked the civic groups to restrain from disseminating the pamphlets, but the groups refused. The ministry has no legal grounds for banning such action. The anti-North organizations, for their part, are on a mission to topple the Kim Jong-il regime, or at least educate their fellow people.
The North released a message that it may cut off all inter-Korean relations if SKorea continues to pursue what the communist regime calls confrontational policy against it. Amid the reports, fierce debates erupted here in the South over contingency plans including a military plan code-named OPLAN 5029, and a series of joint military drills of SKorean and US militaries coincided. The North's rhetoric is aimed at drawing SKorean society into a deep internal division.
SKorea urged North to instantly cease its condemnation against President Lee, while the Seoul government continues to engage Pyongyang despite the repeated verbal provocations. Pyongyang has recently stepped up its criticism against President Lee for his conservative NK policy. The North has claimed that President Lee has abandoned the June 15 joint declaration and the Oct 4 declaration which his liberal predecessors made through summits with the North's leader Kim Jong-il. It claims a full implementation of 2 declarations is a precondition to a resumption of the stalled inter-Korean dialogue. Lee's policy, Vision 3000, puts more priority on the North's denuclearization than inter-Korean economic cooperation. Under the policy, Seoul would offer to provide comprehensive assistance to the North to help it develop $3,000 per capita GDP within the next 10 years, on the condition that the North completely abandons its nuclear ambitions and opens up its economy.

The reports about Kim's ill health have been a wake-up call about the precarious state of conditions in NK. The "Dear Leader's" declining health will add more uncertainty and may cause international instability across East Asia. Kim Il-sung groomed his son Kim Jong-il as his successor for about 2 decades before the younger Kim took power in 1994. Kim Jong-il, however, has not yet even chosen his successor. Indeed, it is widely expected that a new system of collective leadership will emerge if Kim Jong-il is incapacitated. The problem is that NK has no experience with collective leadership. Thus a power struggle in some way may invariably follow a brief period of collective rule. Over the past decade, Kim Jong-il has emphasized the importance of his military-first policy. As a result, the army will be dominant in decision making on important issues like nuclear negotiations. But a problem is its tendency toward incomplete understanding of the implications of political decisions, a problem that will be aggravated further by collective leadership. In such situation, NK's leaders may adopt more hostile policies to obtain economic aid from both SKorea and USA.
US and SKorean Combined Forces of Command currently has a conceptual contingency plan for responding to internal upheavals in the North, such as a mass inflow of NKorean refugees, a civil war or natural disasters. Seoul remains reluctant about openly discussing contingency plans against Pyongyang, especially as ties have become further strained. The previous progressive Roh government had pushed back adopting the plan altogether, citing a possible conflict with the North. The North has been steadily criticizing Seoul's discussions on the contingency plan.

All SKorean troops of the Zaytun Unit in Iraq will be pulled out by Dec 20, ending its 4-year stay there, when its one-year extension expires. Some of the unit's equipment would be donated to Iraqi forces and the rest would be shipped back to Korea by early next year. The Zaytun Unit was first deployed in 2004, with some 3,600 troops, but has been reduced to some 520. The Daiman Unit, a 130-member air support force in Kuwait, will also be pulled out by Dec 20.

ECONOMY AND POLICY

IMF sharply cut its forecast for Korea's economic growth in 2009 to 3.5%, far lower than the 4.3% it projected in July, citing that the global economy is entering a major downturn. It said that Korea would be able to achieve the previously-forecasted 4.1% growth in 2008. Morgan Stanley also lowered its forecast for Korea's economic growth next year to 3.8% from 4.3%.
SKorea posted a trade surplus of US$1.22 bil in Oct on a surge in exports of ships and oil products as well as lower crude prices. Exports rose 10% on year to $37.89 bil, while imports gained 12% to $36.67 bil, marking the first trade surplus since May. Ship exports jumped 118% to $4.17 bil, with overseas shipments of oil products and mobile communication equipment surging 45% and 14%, respectively. Korea's exports grew at the slowest pace in 13 months in Oct as global demand slowed.
The number of Koreans who traveled overseas dropped nearly 20% in Sept on year due to a weaker local currency and the sluggish economy. The number of Korean overseas travelers has been on the decline since May this year, dropping 12.5% and 11% in July and Aug. The number of Japanese travelers to Korea increased 4.75% over the cited period, and that of Chinese travelers jumped 7.28%.

The government announced a package of measures to stabilize financial markets, including a guarantee of local banks' external debt up to $100 bil for 3 years. The Finance Ministry and BOK will also provide an additional $30 bil directly into the banking sector by using foreign exchange reserves. The government will inject KW1 tril into IBK to expand loans to SME.
Korean banks¡¯ short-term foreign debts rose at the fastest pace in 8 years, leading to a shortage of dollar liquidity in the local currency market. At the end of June, domestic banks held $56.86 bil in short-term foreign debts, up 41.7% on year, the highest since 2000. Domestic banks¡¯ total foreign debts reached $127.39 bil as of end-June, up 36.8% on year.
Korea bought back KW900 bil ($624 mil) of government debt from the market ahead of its maturity to help ease the shortage of funds. The finance ministry announced that it will keep reducing the amount of outstanding bonds maturing in 10 and 20 years when needed to stabilize financial market. Policy makers are pumping money into the economy by cutting interest rates, guaranteeing bank debt and making more funds available for small businesses.
President Lee commented that it is not appropriate for banks to keep their high pay structure, while receiving state support, which comes from "taxpayers' pockets." 18 CEOs, including the head of the Kookmin Bank, signed the statement that they would slash salaries of executives, seek to freeze wages and make other cost-cutting steps. The banks also pledged to increase loans to small companies facing liquidity problems and extend mortgage periods.
The National Pension Fund, Korea's largest investor with KW228 tril in assets under management, has also come to the aid of the banks, buying their debt. The state-run fund purchased KW1.4 tril worth of bank bonds from the market.
Fitch Ratings kept Korea¡¯s foreign-currency debt rating at A+, after on Oct 19 pledged to guarantee $100 bil of banks' offshore debt and provide $30 bil in USDollar to banks. Fitch said that providing state backing for Korean banks' foreign borrowings should make it easier for lenders to refinance their longer terms loans. The debt guarantee and the plan to boost KWon liquidity by using part of its $240 bil of foreign-currency reserves are "sufficiently focused and affordable to be consistent with the country's sovereign ratings.

The government began providing liquidity to small firms suffering from losses related to the currency option product KIKO. The Korea Credit Guarantee Fund and KIBO Technology Fund, the nation's 2 largest associations in charge of credit guarantees, will guarantee up to 40%, or KW2 bil ($1.65 mil), in bank loans extended to firms struck by KIKO contracts. SMEs with liquidity problems will also be have access to KW1 bil from mid-Nov. Upon firms' application for help, banks will also provide funds by extending lending or rolling over maturities after checking if the company is capable of recovering from the losses. This move is part of the government's announcement on Oct 1 to pump KW4.3 tril into the market to support liquidity of smaller firms. Currency option contracts called "knock-in knock-out (KIKO)" enable companies to sell dollars with a fixed KWon-USD rate if KWon moves within a certain range set by the contract. But if KWon's value falls below the band, firms are forced to sell the dollar far below the market rate. Many Korean SMEs signed KIKO contracts last year on expectations that the exchange rate would move within the low- or mid-900 won range. 571 companies fell victim to KIKO contracts, with combined losses topping some KW1.69 tril as of the end of Aug.
State-run banks, such KDB and IBK together have raised KW500 bil to provide liquidity to SMEs struck by KIKO contracts. Woori Bank will extend maturity on SME-owned loans which total some KW7.3 tril scheduled to expire by year-end. Shinhan Bank will also join the efforts by providing a comprehensive support package to SMEs from price hike in raw materials and falling won.
BOK will increase the total sum of money allotted to commercial banks for soft loans to small businesses, the latest in a series of measures aimed at injecting liquidity into the local banking sector and shoring up the economy. The so-called "aggregate credit ceiling" for the third quarter has been raised to KW9 tril ($6.36 bil) from KW6.5 tril, the first increase in 7 years. The money will be lent at an interest rate of 3.25% a year, lower than the benchmark policy rate of 5%, which will then lend to SMEs.
The state-run Korea Trade-Investment Promotion Agency will foster 3,000 enterprises until the year 2011 so that each one can export at least $1 mil in goods and services a year, aiming at encouraging local medium-sized businesses to expand their exports. Currently, big businesses account for 68% of the country's export volume, with SME companies responsible for the rest.
Some 120 companies that suffered losses from knock-in knock-out (KIKO) currency option, will file a class action lawsuit early Nov against 13 banks including Citi, SC First, Shinhan and KEB over the allegations that the banks did not fully comply with their obligations and did not try to protect their customers. An analyst viewed that it was unfair to blame banks as customers knew about the hedging risk.
Trying to prevent further declines of the already flagging economy, the Finance Ministry and other government agencies are preparing another round of stimulus measures. They include allowing companies to build factories in the Seoul metropolitan area and reducing taxes on cars. The government is also planning to work with major export companies like Samsung Electronics and Hynix Semiconductor to reduce their dependence on imported electronic parts, particularly from Japan.

Fears about the international financial crisis have sent home prices plummeting and caused construction companies serious liquidity problems. The number of unsold homes in July rose 9.1% from June to break the 160,000 mark for the first time, causing total of 251 construction-related companies gone bankrupt this year. Hoping to curtail worsening conditions in the construction industry, Seoul will inject up to KW9 tril ($6.7 bil) into the distressed sector. The government plans to spend about KW6 tril ($4.5 bil) to purchase land from private companies at 70-80% of the market price. The government also plans to purchase more unsold houses and extend loan maturity for construction companies facing financial troubles. When a construction company fails to recover losses, the government will buy its apartments and rent them out as public homes. Seoul will also encourage people to extend the maturity of their home-equity loans from 3 to 5 years.

BOK made its biggest-ever cut in benchmark interest rates by a record 0.75% to 4.25% a year, in addition to its cut by 0.25% early in the month, joining in a coordinated action of central banks around the world. US Federal Reserve, European Central Bank, Bank of England, along with central banks in Canada, Switzerland and Sweden, each cut their benchmark interest rate by 0.5%, while China cut both lending and deposit rates by 0.27%. Apart from the cut in the base rate, the BOK also cut the interest rate on soft loans for SME companies to 2.5% from 3.25% and rolled out more market-support measures.

KWon is the worst among Asia¡¯s 10 leading currencies on concerns over a flight of capital from Korea¡¯s and export-driven economy. Due to KWon's freefall against the USDollar and JYen, principals of dollar loans and yen loans jumped 52.5% and 78.7%, respectively, as of Oct 8 on year. KWon plunged to mid 1400 to the dollar, and to 1400 level against 100 yen. A year ago, KWon was trading at 914.60 to the dollar, and 781 to 100 yen. The floating interest rate on a 3-month yen loan is now hovering around 6.85% at local banks, almost double from 3.5% a year ago.
The conversions from foreign currency loans to KWon loans at the KOEXIM Bank soared to KW60.7 bil as of the end of Sept from KW13.9 bil a month earlier. At the Industrial Bank of Korea (IBK), the conversions reached KW118.3 bil at the end of last month.
The market cap of shares and overseas equities owned by individual investors were dropped by KW104.2 tril as of the end of Sept. This includes KW62.7 tril lost in shares in the Seoul bourse and KW41.5 tril in Korean and overseas equity investment. Losses from overseas equity investment amounted to KW23.7 tril.
POSCO has sold its own USD200 mil in Oct, aiming to stabilize the exchange rate, as it exceeds KW1400 against USDollar. POSCO also decided to issue global bond worth USD1 bil for the same purposes. Samsung Electronics also unloaded some of its dollar bills to the local currency market, as KWon slipped to mid 1,400 won.

As KWon continues to weaken against the USDollar and the current account balance plunges into the red for the first time in 11 years, concerns are rising that the country may be headed for serious troubles. Government maintains the position that such worries are unfounded. The country's foreign currency reserves have increased by nearly 12 times since 1997 to $239.7 bil. Although the country's short-term foreign debt also increased significantly over the same period, the reserves-to-debt ratio remains at about one-fifth of that in 1997. Unlike 11 years ago, Asia's fourth-largest economy has healthy fundamentals, strong enough to ride out the current storm that began in USA and has since spread globally. A senior official at the IMF said that the Korean economy is much stronger now in terms of government policy and liberalization, than it was in 1997, when it was hit by a severe financial crisis.
Korea plans to sell as much as $5 bil in foreign-currency denominated bonds next year to stabilize KWon. That would be Korea's biggest sale of foreign bonds since 1998, and is part of a planned issuance of KW15 tril ($12 bil) of debt next year for the government's so-called currency stabilization fund.
It is unlikely that the nation will suffer a subprime mortgage crisis like in USA, because local financial firms' loan-to-value ratio is only 48.8%, much lower than the 94% of those in USA.

The interest offered on bank deposits is spiraling up to 7% on saving scheme from mid 5% in Aug, as banks face a growing difficulty in securing funds from the money markets amid the global credit crunch. Aside from deposits, banks raise funds from money markets through issuance of bonds or certificates of deposit and earn interest income by lending that money to corporations and individuals. Korea's 4 major banks, Kookmin, Woori, Shinhan and Hana, were reported to have a total of KW2.4 tril of debts maturing in Oct, KW2.5 tril due in Nov and another KW2.8 tril due in Dec. Korea's major banks and their holdings company are predicted to suffer big falls in their third-quarter earnings.

Standard Chartered Bank, the UK bank that gets most of its profit from Asia, will spend at least $100 mil on its Korean unit, SC First Bank Korea, over the next 3 years, aiming at re-locating and renovating the Korean unit's 300 outlets. Standard Chartered has spent KW649.3 bil ($539 mil) in Korea since it bought the Korean unit in 2005.
Woori Bank, Korea¡¯s second biggest lender, has sold $45 mil worth of bonds to overseas investors to meet its foreign currency needs. The floating-rate notes carry an interest rate of 3.5% higher than the LIBO rate and mature in 2 years. The money will be used to repay maturing foreign debts and extended loans to local companies.

13 East Asian leaders, such as Korea, China, Japan and the 10 members of the Association of Southeast Asian Nations, agreed to create an $80 bil fund to fight the global economic crisis, when they met in Beijing ahead of a 2-day summit with their European colleagues. The $80 bil fund would be created by the end of June next year, and be accompanied by an independent regional financial market surveillance system.

The US Federal Reserve has set up a $30 bil currency swap line with BOK and central banks in 3 other countries, expanding its efforts to thaw money markets to emerging economies for the first time. The deal will help ease investor worries that Korea may face another currency crisis and bring some stability to the local financial markets. Local stocks and currency pulled off a stunning rally as investors took relief from the currency swap. The agreement, effective until the end of April, allows BOK to receive dollars from its US counterpart, whenever necessary, and then provide them to local banks short on US currency. USA has established such deals with a total of 14 countries, including EU, Switzerland, UK and Japan.

The price of Dubai crude oil has been dropped from $91.12 per barrel at the beginning to $53.99 despite the OPEC decision to cut the output, and ended the month at $57.08. Global oil prices have plunged 40% since peaking at $147.27 a barrel on July 11, with the global economic downturn slowing demand.
Korea and East Timor have signed MOU for the supply of natural gas to Korea. Price and volume are yet to be agreed
Since Gasoline prices at service stations nationwide reached KW1,699.85 a liter on Oct 18, the price decline has accelerated to almost every other day as of Oct 21 at KW1,696.23 and to KW1,627.81 on Oct 28.

CHAEBOLS

A Seoul appeals court upheld a lower court's decision to hand a suspended 3-year jail sentence and a KW110 bil ($80.2 mil) fine to former Samsung Group Chairman Lee Kun-hee for tax evasion. The court, however, cleared the 66-year-old tycoon of charges of illicit securities transactions to transfer managerial rights of the conglomerate to his only son in 1996. Independent counsel will appeal the ruling.
Samsung was selected as the highest brand for 4 consecutive years in 2007 by Business review of Beijing University. Samsung brand value was raised by 7.9% from 2006 to CY56 bil, followed by Hial with CY47.2 bil, Nokia CY41.1 bil. The Review appreciated Samsung for its social contribution to Chinese people.
SEC, No 1 maker of memory chips and flat screens and the second-largest producer of handsets in the world, dropped its $26-per-share offer to buy SanDisk, valuing the US firm at about 80% premium to the closing share price. Samsung launched its $5.9 bil unsolicited bid to buy SanDisk 8 months ago. However, SanDisk spurned the offer, saying SEC undervalued the company. Samsung expressed discontent with San Disk's move to have signed a MOU to sell $1 bil worth of equipment to its joint venture partner Toshiba. Antitrust issues are cited as the major obstacles to Samsung's potential acquisition of SanDisk. SEC controls 42% of the flash memory market, and the merger with SanDisk will boost the share to over 50%. SanDisk reported its biggest quarterly loss in almost 7 years.

LG Electronics is to invest KW220.2 bil ($167 mil) in 2 solar cell production lines. LGE also signed a MOU to jointly set up a solar cell company with Conergy AG. The world's solar cell market is expected to be valued at around $10 bil.
Creditors of Daewoo Electronics, led by the state-run Korea Asset Management, will soon sign a MOU with Ripplewood Holdings, US-based private equity fund, for a controlling stake in SKorea's third-largest electronics maker. The fund offered around KW400 bil (US$284 mil) for the deal. Creditors plan to complete the prolonged sale of the electronics maker by the end of the year. The sale of Daewoo Electronics, which launched in Oct 2005, has been sluggish due to labor disputes and disagreements over price. The sale was stalled again when Morgan Stanley, scrapped its bid for the electronics company in Aug.

The number of industrial plant orders won by Korean companies rose sharply in the third quarter, fueled by infrastructure demand in oil rich countries. Orders for offshore facilities, desalination and petro chemical plants as well as other industrial infrastructure rose 45% annually to $15.1 bil in 3 month period. The total orders secured increased to $38.2 bil for this year. The figure would make Korea one of the world¡¯s top 5 plant-exporting countries.
Daelim Ind signed LOI with Kayan Petro Chemical Co of Saudi Arabia to construct HDPE plant in Jubail Industrial Complex, worth $400 mil.
Daehan Cable signed the contract with Russian Electricity authority to establish the high voltage network at $175 mil for 3 years. The contract includes the supply of super high voltage underground cable and its accessories.
Yonsei I&D, a local construction company, has signed a deal for a housing project with the Mongolian conglomerate Bishrelt Holding LLC to build the $75.9 mil worth, the 120-house residential complex, known as the Jaisan First Class Townhouse, in Mongolia for the completion by July 2010.

USA has decided to scrap punitive tariffs on semi-conductors made by Hynix Semi conductors, paving the way for the world¡¯s second largest maker of computer memory chips to increase exports to its biggest market. USA levied the 44.29% punitive duties on Hynix in 2003 after Micron Technology appealed the Korean government¡¯s bailout of Hynix amounted to an illegal subsidy. In Aug this year, USA lowered duties to 4.9% from 23.8% for the company¡¯s chip exports to USA in 2006. The US commerce department in March cut the tariff to 23.8% from 31.9% for the exports in 2005. In the meantime, Korea asked WTO in Sept to look into Japan¡¯s punitive tariffs on computer memory chips made by Hynix, saying it could take retaliatory measures if necessary. In Aug, Japan decided to reduce its punitive duties on Hynix chips to 9.1% from 27.1% in effect by 2010. WTO ordered the tariff be abolished by Sept 1 of this year.
LG Electronics, Korea's second-largest consumer electronics maker, said a US federal judge has ruled in its favor in a patent lawsuit brought by US appliance maker Whirlpool Corp, ending a 5-year patent dispute related to washing machine technology. For all of this year, LG aims to sell 10 mil washing machines, up 12% on year.

SKorea's production of cars, trucks and buses fell 10.7% in Sept on year to 259,012 vehicles, dragged down for the fourth consecutive month by weaker demand in USA and Europe. It was the biggest monthly drop so far this year. Hyundai Motor and 4 other domestic companies sold a total of 33,704 vehicles in USA in Aug, marking the lowest monthly figure since July 2003. Local carmakers' exports to the Middle East overtook those to Western European nations for the first time. 5 Korean carmakers exported 245,376 vehicles to the region during the first 8 months of the year, while 244,558 units were shipped to Western Europe. The Middle East is now the third largest export destination for the car industry after NAmerican and Eastern European nations.

Hyundai Kia Automotive Group plans to bolster R&D, concentrating on hybrid technology, non-memory semiconductors used in various control systems and software. As cars become more intelligent, the cost of electronic parts will account for up to 40% of the production costs. The hybrid version of the mid-sized sedan Sonata, scheduled for launch in 2010, will be a full hybrid that will first be launched in North American markets. The company has already developed much of the technologies required for hybrid cars including the battery, for which the company had relied on imports from the Japanese carmaker Toyota Motor in the past.
Loss-making Ssangyong Motor, the Korean unit of China's Shanghai Automotive Industry Corp, has allowed some 350 workers to take paid leave in an effort to cut costs as sales plunged. In the first 9 months of this year, Ssangyong¡¯s vehicle sales declined 30.2% to 66,793 units. The carmaker had originally planned to sell 141,800 vehicles this year, compared with 131,637 units so far sold this year.

KT Corp has signed a $38 mil deal with the Rwandan government to build the backbone of its new telecommunications network, the infrastructure that connects various parts of the network. The company will lay fiber optic cable and internet networks nationwide by Nov 2009 and provide equipment and training for systems operators. KT will also provide with security and control systems required to establish and run the network operations center. It is the second deal KT has formed with the Rwandan government after the contract to establish a WiBro wireless internet network and fiber optic cable network signed in Nov last year.
KT has also signed a MOU with Apple Inc to collaborate in applying the WiBro technology to Apple's products including the iPod media players and MacBook laptop computers. 2 companies also plan to sell MacBook laptop computers bundled with WiBro service at Apple retail stores and KT outlets at cheaper prices than other channels.

SK Energy, the nation's largest oil refiner and the most active in overseas oil exploration projects, has a total of 500 million barrels of oil reserves around the world, producing 25,000 barrels of oil and natural gas everyday in 11 fields. SK Energy has access to a total of 32 oil fields in 17 countries. If the company's Brazil oil field expands daily output, its daily total is expected to increase to 30,000 barrels. SK Energy aims to double its oil reserves to 1 billion barrels by 2015. The company invested more than KW450 bil in energy development last year, and plans to spend KW630 bil in developing energy sources overseas this year.
SK Energy had entered the lubricant base oil market in UAE by partnering with the Indonesian state-owned oil company PT Pertamina, for the first time that a Korean refiner has exported finished products of lubricant base oil in the Middle East. The company currently produces 21,000 barrels of lubricant base oil a day in 2 plants in Ulsan and 7,500 barrels in Dumai, Indonesia.

GS Caltex, the second-largest refiner, is seeking a similar strategy, but is pursuing more M&A deals. Last Nov a consortium including GS Holdings sealed a contract to secure 4.75% of the Bazian oil field in northern Iraq. One month prior to that, the refiner has agreed to buy exploration rights stakes from Chevron in Vietnam. GS Caltex is aiming to directly import 10% of its crude oil demands. GS Holdings has recently participated in oil development projects through purchases of 5, 20, and 30% stakes in 3 separate oil fields in Indonesia. GS Holdings has been participating in the exploration of 7 oil fields in Indonesia, Yemen, Kazakhstan and Iraq since 2005.

The state-run Korea Resources Corp will build its first special alumina refinery with the investment of KW30 bil, to help ease the country's dependence on foreign imports. The refinery is expected to begin operations in Sept 2009 and will have an annual production capacity of 50,000 tons, equivalent to what the country imported last year. The economic impact should be equivalent to KW94.2 bil (US$70.93 mil) for the exports and import substitutions.

The French automotive parts maker Faurecia's research center and production facility in Hwaseong has been completed after its investment of $32 mil. Faurecia is the world's ninth-largest auto motive parts maker, recording more than KW16 tril ($13 bil) sales in 2007. The company holds the largest share of the global market for exhaust systems and the instrument panel. The new facilities boast 28% of the country's automobile production plants and about 30% of Korea's auto-part production facilities.  Tonen Specialty Separator, a subsidiary of US Exxon Mobil, has resumed large scale investment in Korea in a move that could improve the country's competitiveness in the rechargeable battery sector. The investment in construction plants for key battery parts used in information technology products and hybrid cars could total US$350 mil by 2014, with US$150 mil being injected in the form of FDI. Tonen, based in Japan, produces 35% of the lithium battery separators in the world.
Lotte Mart acquired ¡°Macro,¡± Indonesian super chain with its 19 branches for KW385.9 bil, expecting firm footing in the country.

Hyundai Steel, Korea's second-largest steel maker, is closer to becoming one of the world's major steel producers, as its first blast furnace was completed. The completion of the Dangjin project will help replace steel plate imports worth some $8 bil a year. 2 blast furnaces built by Hyundai Steel will produce an annual 8 mil tons of high value-added steel plates from Jan 2010. The company currently produces some 11 mil tons of steel from its electric-arc furnaces, using scrap metal as raw material.
POSCO plans to drop its stainless steel production to 340,000 tons, 30% down from planned production in the fourth quarter. The company plans to produce 1.5 mil tons of stainless steel this year, down from 1.7 mil tons a year earlier. The company will produce a total of 33.5 mil tons of crude steel, up from 31.1 mil tons a year before. Hyundai Steel and smaller Dongguk Steel Mill will cut down production of H sections, but will focus on production of inverted angles. Dongbu Steel will decrease its steel production by 100,000 tons from the originally planned 600,000 tons in the fourth quarter.

MONETARY AND ECONOMIC INDICES

Foreigners' net selling in Korean bourse has topped some KW34.16 tril in the last 10 months, the highest since the stock market opened to foreign investors in 1992. Dollar demand in the foreign currency market is also rising as more investors are cashing in their stocks and bonds to transfer their funds overseas. The benchmark KOSPI plunged to 938.75 points, compared with the highest peak of 2,064.85 on Oct last year. The stock index lost more than half the value. KWon dropped to 1,424 won against USDollar. Losses from equity funds have topped KW67 tril ($47 bil) so far this year on the plummeting stock market. The net asset capitalization of the nation's equity funds was put at KW80.3 tril as of Oct 23, down over KW55.3 tril from KW135.6 tril of the end of last year. Shares in the Seoul bourse rose 11.95%, after BOK signed a $30 bil currency swap deal with the USFR, mitigating the uncertainty stemming from liquidity problem. KWon rose 13.8%, to KW1,250 against the US dollar.
Amid an acute dollar drought, the National Pension Fund indicated that MBK Partners, an Asia-based regional private equity fund, will invest $2 bil in Korea, in partnership with the pension fund. It comes at the heels of a similar joint investment deal which envisions Oaktree Group, a Los Angeles-based private equity fund, investing $3 bil in Korean infrastructure projects.

The benchmark KOSPI started the month from 1439, plunged to the bottom of 938 breaking psychologically important 1000, when Dow Jones industrial average plunged below 9,000 for the first time in about 5 years and then recovered to 1113 at the end of the month.
Among major Asian countries, foreigners unloaded a net $36.3 bil in local shares by Oct 16, up 37% from last year's net sale of $26.5 bil. By comparison, the net sale was $16.9 bil in Taiwan, $15 bil in India, $5.1 bil in Thailand and $672 mil in the Philippines. Shares held by foreigners in the KOSPI and Kosdaq markets shrunk to 28.08% this year, from 30.96% as of the end of 2007. Since there have been rumors that C&Group is heavily exposed to a liquidity risk, financials plunged on worries over banks' possible exposures to the C&Group. KB Financial Group, Shinhan Financial Group and Woori Finance Holdings nosedived to the lower limit 15% a day. It is said that Woori¡¯s exposure to C&Group is around KW227.4 bil, Shinhan is KW43.9 bil.
The exchange rate of KWon against USDollar has been fluctuated in the range of 1308-1390-1205-1468-1295 through the month. The dollar shortage is the biggest factor to drive down Kwon in the market. Many banks are finding it hard to borrow short-term as well as long-term dollars because of the global credit crunch. KWon has tumbled almost 30% this year.

The yield on 3 years corporate bond was raised from 7.81% to 8.13%.
The Korea¡¯s consumer price index rose 4.8% in Oct on year, decelerating from a 5.1% in Sept, as a decline in oil and commodity prices reduinced overall import costs.
SKorea`s foreign exchange reserves declined by $27.4 bil in Oct, as the government aggressively intervened in the currency market to prop up the weaker local currency and provided dollars to local banks suffering from a liquidity crunch. The reserves fell from $239.7 bil in Sept to $212.3 bil in Oct.
Korea's producer prices index grew 12.3% on year in Aug, slowing from a decade-high 12.5% gain in July, due to recent retreats in oil and raw material costs. Prices of industrial products advanced 16.8% in Sept, slowing from a 17.1% gain in Aug.

The unemployment rate stood at 3% in Sept, compared with 3.1% in Aug, but job creation slowed to a 43-month low, as companies remained reluctant to hire new workers amid growing economic uncertainty. The percentage of economically active 20-somethings has fallen to a record low. Only 62.7% of Koreans aged between 20-29 were economically active in Sept.
The deteriorating credit crunch in the banking sector drove up the maximum annual interest rate on home-backed loans. Shinhan Bank set its fixed interest rates on 3-year mortgage loans at a record high of between 8.4-10%. At Kookmin Bank, the fixed interest rates on 3-year mortgage loans went up to between 8.3-9.81%. Woori and the IBK have raised their mortgage interest rates to a maximum level of 9.74%. Currently, local banks are paying 7.6% in interest on 3-year, AAA-rated bonds.

SHIPBUILDING AND SHIPPING

The transaction of secondhand vessels disappeared, and new building contract for substantial size of commercial ships is not seen, as the gap of the prices between owners and builders, and buyers and sellers, is too wide. BNP Paribas warned the newbuilding contracts sank by over 60% in Sept. In the face of tighter market liquidity, it forecasted Korean orders will shrink by 19% next year amid another 25% drop in global orders, despite the fact ship prices are starting to soften. The credit crunch seems to lead a number of cancellations of orders. Some Greenfield shipyards face the difficulties to get built or will end up in trouble. Ship financing becomes stricter and payback is being accelerated. Lenders financed 60-80% of ship¡¯s value but now 40-60%, the period has been shortened from 7-12 years to 3-5, if there is any money available.
But the fundamentals of the market are still strong as global demand remains robust, thanks to the mandatory phasing out of single-hulled tankers and demand from the countries like China and India. It is still question when the market is reflecting such demand. BDI kept free fall to 885 on Oct 30, with no actual transaction.

HHI completed the plant for joint venture under the name of ¡°Watsilla-Hyundai Engine¡± to produce dual fuel engines for LNG carriers. It will have the capacity to produce up to 120 units of Wartsila 50DF a year. The company was established in 2007 with the total investment of KW68 bil. HHI reached 80 mil BHP in accumulated output of its engine production, for the first time in the world. HHI had total 12 naming ceremonies in Oct, to establish a world record. HHI signed a contract with Albatech of Metasystem Group in Italy to supply solar generation module, worth $30 mil.
SHI received orders from unnamed Italian for 4 x panamax conros, unidentified Italian owner 1 x 115K tanker and Geden Lines 2 x 115K aframax tanker.

Korea¡¯s pension fund has decided to scrap its plan to bid for DSME amid the global financial turmoil. The National Pension Service, the country¡¯s largest investor, indicated to spend up to KW1.5 tril to make a joint bid. The fund has been in talks with POSCO, GS Group and Hanhwa Group to choose a partner for the acquisition of the world¡¯s third largest shipyard.
POSCO and GS Group decided to take over DSME by an alliance. The consortium will be a 50:50 venture. However, GS Group has suddenly pulled out of the consortium on the eve of bidding, due to the disagreement on the price. POSCO decided to press on alone without GS Group. POSCO, HHI and Hanhwa submitted their bid on Oct 13.
KDB has disqualified POSCO from the share-purchase race on Oct 17. The contest for the shares became a straight forward 2 horse race between HHI and Hanwha Group. Hanwha Group has been reported that it made the highest offer about KW7 tril ($5.2 bil) for the stake, while HHI was at about KW5 tril.
KDB has picked Hanwha as the preferred bidder for a 50.2% stake in Daewoo on 26. KDB wants at least $3.81 bil for the sale, but market capitalization of whole DSME reached KW4.48 tril, a sharp drop of nearly 30% from its peak in Oct. Hanwha will conduct due diligence for 3-4 weeks and the KDB hopes to sign a final contract with the group by the end of this year.
The sale would be one of the country's largest-ever takeover deals, but the current global financial markets made it harder for potential bidders to secure funding. Shares in DSME closed at KW11,000 on Oct 24, less than half of the price 3 months ago when the sale was announced.
Hanwha Group plans to raise some KW9 tril, including KW3 tril by selling or listing subsidiaries and KW2-3 tril in cash it has already secured. Hanwha Group is in talks with 2 European shipowners, who want to make a significant amount of investment over funding, for its takeover of DSME. The companies are involved in oil exploration and will need rigs and ships. If Hanhwa acquires DSME, its ranking among chaebols will leap from 10th to 8th.

STX won the order from Iranian Offshore Oil Company for 1+3 x 2.2m barrel floating storage unit. The deal was won jointly by STX and Samsung C&T Corp to take charge of the entire contract process from design, materials procurement, manufacturing, installation to trials, enabling STX to inroad into the offshore market. STX is to build the hull and install the propulsion system for the vessel. STX received an order from unnamed Asian owner for 2 x 81K Panamax bulker.

C&Heavy indicated that it is studying debt workout program, as it has been running into liquidity troubles after investing Shinwoo shipbuilding in Koje, receiving orders for 60 ships, mostly wrong timed bulk carriers. C&Heavy failed to sell its steel pipe manufacturing sector to Hyunjin Group. The group aimed to invest the money to shipbuilding business, which faced difficulties due to cash shortage.
Korea's C&Line has handed back some 20 ships from charter so far this year, ending charters rather than dropping them in a panic. It is currently not offering any services. C&Line has been dropped out as a partner in a service between Japan and SKorea jointly run with 3 other SKorean operators, Dong Jin, Heung-A and Dong Young Shipping. C&Group has focused on shipbuilding but is also having difficulties obtaining refund guarantees for a 40-ship backlog of 81K kamsarmaxes and financing for the construction of a second shipyard on Koje Island.

26.6K Bright Ruby, 1987-built, owned and managed by J&J trust of SKorea, has been released from Somlia pirates along with its crew of 21. The bulker was snatched in the Gulf of Aden on 10 Sept as it sailed from Europe to Asia. The conditions for the release were not known.