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  Korea Report - September 2018
  Author : Hwang & Co     Date : 18-10-05 14:33     Hit : 40766    
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Declaring a formal end to the Korean War will encourage NK to move further down the path toward complete denuclearization, while economic cooperation with the North will keep NK from turning back, President Moon Jae-in said on 25th, speaking before a group of some 200 UN opinion leaders. Moon insisted that formally ending the 1950-53 war will not affect the SKorea-US alliance. Moons remarks came one day after he held a meeting with President Donald Trump to explain the outcome of his trip to Pyongyang for his third summit with Kim Jong-un, in which Kim agreed to take additional denuclearization steps in exchange for corresponding measures from the US. Moon earlier said the corresponding measures could, or should, include a formal end to the Korean War that would provide some security assurances to the North. Moon has said a formal end to the war will only be a political declaration and that a peace treaty can be signed only after the North completely denuclearizes.

President Moon and Kim Jong-un kicked off their historic summit on 18th in hopes of reviving the stalled denuclearization talks between the US and NK. Among items on the agenda were denuclearization, inter-Korean relations and ways to ease military tensions along the border. Meeting face-to-face again after their previous summit on May 26, the two leaders expressed hopes of achieving meaningful results at the meeting. Kim credited Moon for improving inter-Korea and Washington-Pyongyang relations. Prior to the visit, Moon had stated that his goal was not necessarily to sign a new agreement, but to establish permanent peace on the Korean Peninsula. Moon is being accompanied by some 110 delegates consisting of government officials and a special entourage of business tycoons, cultural figures and civic group leaders. This marks the third inter-Korea summit since Moon took office last year. The two previous meetings were held April 27 and May 26 in the border village of Panmunjom. Moon is also the third South Korean president to have held a summit with a North Korean leader, with former presidents Kim Dae-jung and Roh Moo-hyun meeting in 2000 and 2007, respectively, with the Kim Jong-il, Kim Jong-uns now-deceased father.
While the two Koreas took a significant first step, the Pyongyang Declaration is missing some of the key demands from the US, such an inventory of its nuclear program. There was also no mention of the North giving up its stockpile of ballistic missiles and nuclear warheads. In addition, agreement on economic cooperation cannot be implemented without the lifting of UN sanctions against NK.

NK on 4th lashed out at the US for standing in the way of the two Koreas efforts to improve inter-Korean relations. Rodong Sinmun carried a commentary titled Blocking NKorea-SKorea relations is blocking the US own road ahead. It called upon SKorea to pursue inter-Korean projects without being influenced by the US. How can we understand the US, which said it supported the Panmunjom Declaration yesterday but is showing a contradictory attitude today? the newspaper asked. Why is the US overreacting to the advancement of NKorea-SKorea relations like that? The driving force for NKorea-SKorea relations is within our people, and the pace of advancement of those relations is up to a timeline we set, the commentary said.

SKorean Prime Minister Lee Nak-yon urged BOK to raise key interest rate, citing concerns about financial instability. Without a rate hike, problems related to capital flight, a widening gap in interest rates between Korea and the US and the upward pressure on the level of household debt will persist, said Lee. Lee also blamed expansionary monetary policy during the former Park Geun-hye administration for the faster pace of household debt growth. BOK Gov Lee Ju-yeol called such remark by the official inappropriate, as they make an impact on the market and undermine neutrality in monetary policy decision, in press briefing on Aug 31st after its decision to freeze the rate at 1.5% for nine consecutive months in Aug.

SEC ranked seventh in global brand based on marketing consultancy Prophet's annual brand relevance survey. SEC's ranking is up three notches from last year and the highest among non-American brands. SEC has also made the top 10 list for the fourth consecutive year. SEC is also the sole Asian company that has ranked among the top 10 most relevant brands in the World's largest economy. Prophet conducted a survey of 12,694 US consumers about 299 brands across 37 industries, measuring across four brand principles: customer obsession, ruthless pragmatism, pervasive innovation and distinctive inspiration.

HMM, on 28th, finalized ULCs newbuilding contracts with Korean Big3 yards. To buy 20 containerships, HMM is spending a total of KW3.1532 tril (abt $2.84 bil), and the contract lasts from Sept 28, 2018, to June 30, 2021. All the 20 ships will be built to LNG-ready design and be equipped with SOx scrubbers. On June 15, HMM signed LOIs with the Big3 for eco-friendly containerships. HMM ordered 7 x 23,000 teu ships at DSME (abt $154 mil each), 5 x 23,000 teu at SHI (abt $153 mil each), and 8 x 15,000 teu at HHI (abt $121 mil each). Korea Ocean Business Corporation is providing financial support for the vessels.

SKoreas third largest conglomerate SK Group is moving to shed its shipping business, SK Shipping Co, amid worsening financial conditions of the unit and the governments regulations on intra-affiliate transactions by large business groups. SK Holdings Co is reportedly seeking to sell a majority of its stake in SK Shipping to local private equity firm Hahn & Co for an estimated KW1.5 tril ($1.3 bil). Founded in 1982 as Yukong Shipping, SK Shipping was once the nations fourth largest container shipper following Hanjin Shipping, HMM and STX Pan Ocean during the industry boom until the mid-2000s.


President Moon explained his talk with NKs Kim Jong-un at UN [p.2]

President Moon addressed on Japans wartime comfort women at UN General Assembly [p.3]

SKorea launched JV and public sector committee for hydrogen economy [p.3]

President Moon and Kim Jong-un held their third summit in Pyeongyang [p.5]

Pyongyang Declaration is missing some of the key demands from the US [p.7]

NK lashed out at the US for standing in the way of inter-Korean relations [p.8]

BOK Gov Lee called PM Lees request to raise key interest rate inappropriate [p.9]

Steep rise in debt for self-employed people becomes a ticking time bomb for the economy [p.10]

SKorea's top 10 conglomerates slashed donations by 14.5% in the past two years [p.11]

Samsung Electronics ranked seventh in global brand [p.11]

Chung Eui-sun will be able to wield greater power across 55 affiliates of Hyundai Motor [p.12]

SK hynix was picked as the sixth-most valuable SKorean brand in 2018 [p.12]

Korea Gas is to operate a pilot project involving 400-HP LNG trucks [p.13]

HMC and Kia Motors sold a combined 111,406 units in the US in Aug [p.14]

Daily stock trading on SKorean bourse has recovered from jitters by US-China trade dispute [p.15]

The value of the JYen is expected to further weaken against the Kwon [p.16]

HMM finalized ULCs newbuilding contracts with Korean Big3 yards aiming 1 mil teu era [p.17]

Korean shipbuilders took 88% of global LNGC orders and 87% of VLCC orders in Jan-Aug [p.17]

STX O&S secured R/G for two 50K MR tankers awarded by OceanGold Tankers [p.20]

SK Group is moving to shed its shipping business, selling SK Shipping [p.21]

KEB Hana Bank to provide financial support to shipping industry [p.21]

MOTIE will build 100 LNG-powered ships, establish 5 LNG bunkering facilities by 2025 [p.22]


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