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  Korea Report - December 2018
  Author : Hwang & Co     Date : 19-01-06 08:21     Hit : 3535    
   Korea Report - December 2018 (secured).pdf (482.7K), Down : 5, 2019-01-06 14:42:11




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The US and China reached a 90-day cease-fire on 1st in a trade dispute that has rattled financial markets and threatened world economic growth. The breakthrough came after a meeting between President Trump and Xi Jinping at the Group of 20 summit in Buenos Aires. Trump agreed to hold off on plans to raise tariffs Jan 1 on $200 bil in Chinese goods. The Chinese agreed to buy a not yet agreed upon, but very substantial amount of agricultural, energy, industrial and other products from the US to reduce Americas huge trade deficit with China.


Moon administration has yet to improve youth employment in the country as the nations lackluster job market has dealt a serious blow to college and high school graduates. The unemployment rate for those between 15 and 29 years old was 10.7% in Oct, the highest since 2015. Furthermore, the extended unemployment rate that includes job seekers, those who have abandoned job seeking and workers looking for night jobs as a sideline reached 22.5%. The number of employed in their 20s increased by 61,000 to about 3.73 mil, but the increase in employment could be attributed to an increase in part-time or short-term jobs rather than an improvement in stable jobs.


South and North Korea held a groundbreaking ceremony on 26th to highlight significance of their goal of modernizing and reconnecting cross-border railways and roads. The ceremony kicked off at Panmun Station in the Norths border town of Kaesong. Earlier in the day, a special Kaesong-bound train transported some 100 SKoreans celebrities to the ceremony, joined by Norths officials with some 100 NKoreans. Officials from the UN, China, Russia and Mongolia also attended, witnessing what could be viewed as the start of an ambitious plan to connect the inter-Korean railway to the Trans-Siberian Railway, connecting the Korean Peninsula to Europe. However, it is notable the ceremony was made with no firm schedule to start the work, as vague as the most NKs deals are exercising.


The head of Bank of Korea, Lee Ju-yeol, warned of persisting internal and external risks in Asias fourth-largest economy and the lack of a driver for economic growth other than semiconductor businesses within the next five years. Lee said Korea has yet to come up with an alternative in the face of the downturn of the semiconductor-making business, mainly led by Samsung Electronics and SK hynix. The chipmaking industry has been a major pillar of Koreas export-driven economy. In Nov alone, semiconductor exports came to $10.8 bil, topping the $10 bil mark for 7 consecutive months. But on-year semiconductor export growth in Nov came to 10.6%, showing a contrast with that of July at 30.2%, indicating fallout from lingering threats of a global trade war and concerns over semiconductor prices. Korean ICT goods exports fell in Nov for the first time in 25 months.


Samsung Electronics (SEC) ranked first among major businesses around the globe in terms of spending on R&D for the 2017 financial year. According to European Commission on 12th, SEC spent EU13.44 bil ($15.2 bil), up 11.5% on-year, in R&D projects over the period. It was based on 2,500 companies from 46 different countries. Alphabet Inc, parent company of Google, followed SEC with EU13.39 bil. Volkswagen and Microsoft Corp spent EU13.1 bil and EU12.3 bil, respectively.

SEC topped smartphone production in the third quarter, securing market share of almost 20%. It is likely to take the top position for the entire year, thanks to the Galaxy A and J devices. According to TrendForce, SEC is estimated to produce 75 mil units in the fourth quarter. Apple is to secure market share of 19.7%, while SEC is estimated to hold market share of 19.6% in the final quarter, it added.


2018 was a year that Korea reclaimed the global no.1 place in shipbuilding world with order rallies in the segments of large gas carrier, mid and large-sized tanker, and containership. It seems the shipbuilding industry had continued its journey to rehab following 2017 when it climbed out of 2016s order slump. During 2018, Korean shipyards almost monopolized LNGC newbuilding orders, bagging a total of around $29.3 bil of orders including offshore platforms and special purpose vessels. Out of 65 LNGCs ordered in 2018, Big3 bagged 61 units. HHI Group won 25 units of LNGCs (HHI-12 units, HSHI-12 units, HMD-1 unit), DSME won 18 units while SHI bagged 18 units. Clarksons Research predicts 69 LNGCs would be ordered in 2019.




TOP 10 NEWS STORIES IN 2018 [p.2]

The US and China reached a 90-day cease-fire in a trade dispute [p.3]

Seoul Court ordered to issue a Syrian asylum seeker a humanitarian stay visa [p.4]

The National Assembly passed the KW469.6 tril budget bill in a 168-29 vote [p.4]

Music video for BTS, Idol, recorded more than 300 mil YouTube views [p.6]

Two Koreas held groundbreaking ceremony on modernizing, reconnecting railways and roads [p.8]

A US court ordered NK to pay $500 mil in damages to the parents of Otto Warmbier [p.9]

The head of BOK warned of persisting internal and external risks in SKoreas economy [p.10]

IMF forecasted Korean economy would expand 2.8% this year and 2.6% next year [p.11]

SKorea posted trade surplus of $70.5 bil in 2018, 10th consecutive year of surplus [p.11]

SEC ranked first among global businesses in terms of spending on R&D in 2017 [p.13]

SEC topped smartphone production in the third quarter [p.15]

HMCs Genesis G70, a sports sedan, was named car of the year by MotorTrend [p.16]

Major SKorean builders are making inroads into overseas emerging markets [p.16]

SKoreas stock market indexes in 2018 are set to mark largest yearly slump in a decade [p.17]

SKoreas forex reserves reached a record high level at $403.69 bil as of end Dec [p.18]

Korea reclaimed the global no.1 place in shipbuilding world in 2018 [p.18]

HHI announced that it logged $6.4 bil in revenue for the 11 months [p.22]

STX O&S has received RG from KDB for a newbuilding contract [p.24]

Korean operators are to order large bulker series from Chinese shipyards [p.25]

Number of new ships Korean government will order in 2019 will reach 60 level [p.25]



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