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  Korea Report - April 2019
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KOREA REPORT - APRIL, 2019.

 

The result of parliamentary by-elections in South Gyeongsang Province on 3rd have sent ripples through the political arena. Main opposition Liberty Korea Partys Jeong Jeom-sig take Goseong constituency of Tongyeong, in a landslide win. Yeo Young-guk of Justice Party took Changwon-Seongsan constituency. On 4th, Liberty Korea Party celebrated the results, describing it as judgment by the people on Moon administration. It also hinted at stepping up efforts to resist government policies.

 

More than 400 homes, 920 livestock facilities, 77 warehouses and 100 buildings were confirmed to have been burned in a devastating forest fire that raged through east coastal regions, government said on 7th. The fire, which started on 4th night in the county of Goseong, 160 km northeast of Seoul, spread quickly to neighboring cities and counties, reducing forests about 742 times the size of a soccer field to ashes.

 

BTS scored its third No 1 on the main Billboard 200 album chart, becoming the first group since the Beatles to earn three No 1s in less than a year, Billboard said on 21st. Map of the Soul: Persona, BTS' latest album released on 12th, debuted atop Billboard 200 for the week of April 27th. In the week ending 19th, BTS earned 230,000 equivalent album units in the US, including 196,000 in album sales and 26,000 in streaming equivalent albums.

 

Kim Jong-un on 24th arrived in Vladivostok, Russia, via his private train, a day ahead of his first summit with Russian President Vladimir Putin. In an interview with Russian media after a welcome ceremony in Khasan, Kim hinted at strengthening cooperation with Moscow in regional security issues. Besides the diplomatic rhetoric, Kim gain nothing from President Putin but the advice to give up nuclear weapons.

 

A NKorean propaganda outlet, Uriminzokkiri, dubbed Our People Together, on 9th denounced President Moons proposal for another summit and SKorea's plan for the development of inter-Korean relations this year as unrealistic, saying that cross-border ties are currently stalled because Seoul has given in to US pressure.

 

SKoreas economy shrank in first quarter of this year in the biggest contraction since 2008 global financial crisis, owing to a sharp drop in exports and slowing capital investments. The countrys GDP for the period shrank 0.3% on-quarter, a surprise figure considering the median market forecast of a 0.3% gain.

 

SKorea's sovereign debt hit record high of KW680.7 tril ($598.9 bil) in 2018. The 2018 debt growth is the slowest since 2009. SKorea's sovereign debt accounted for 38.2% of nation's GDP in 2018.

 

The combined operating profit of 40 major listed firms is estimated at KW15.5 tril ($13.3 bil) in the Jan-March period, down 46.5% on-year. Samsung Electronics operating profit plummeted 60.4% to KW6.23 tril for the quarter, lowest since third quarter of 2016. Its sales fell 14.1% on-year to KW52.4 tril. SK hynix posted an operating profit of KW1.3 tril for the quarter, a 69% on-year plunge. Hyundai Motor saw its operating profit gain 21.1% to reach KW825 bil and Kia Motors operating profit jumped 94% on-year to KW594 bil. SK Innovations operating profit slipped 53.5% on-year to KW331 bil in the first quarter, while sales rose 1.9% on-year to KW12.4 tril. LG Chem reported an operating profit of KW275 bil, down 58% on-year. The average ratio of operating profit to sales by the 40 firms stood at 6.97% for the quarter, compared with 12.76% a year ago.

 

Cho Yang-ho, Hanjin Group and Korean Air chairman, died from a lung disease. The 70-year-old business tycoon died at a hospital in Los Angeles. Chos death comes two weeks after he was voted out from Korean Airs board, making him the first founding family member of a major conglomerate to be forced off a board. Moon government carried out indiscriminate investigation on Korean Air and Hanjin Group. The companies have been raided 18 times after being investigated 25 times by 11 state agencies. Cho and his families were called in a row and had to stand in the photo line 14 times.

 

HHI Group and KDB started due diligence on DSME on the 1st. The Group conducts due diligence on DSME, while KDB on HHI. The due diligence is to take 8 weeks. Some of the industries are expecting physical conflicts, as DSME union is to block the due diligence, even though the assessment only occurs in papers.

 

The merger between Sinokor Merchant Marine and Heung-A Shipping will be finalised in Oct. The two companies had previously teamed up with HMM on intra-Asian containership services in 2017. The current merger plan was agreed last year, with the idea of it being completed before the end of 2019. Sinokor is described as the fourth biggest Korean liner company, with Heung-A at five. Following the merger, they will have a capacity of 88,300 teu, number three in Korea and 19 on the global list. They will start consolidating their container shipping services. South-east Asian routes will be integrated first and then China/Japan services by the end of next year.

 

 

TOPICS.

 

In Parliamentary by-election, opposition Liberty Korea Party took Tongyeong in landslide win [p.2]

Moon's approval rating fell to 41%, lowest since he took office in May 2017 [p.3]

BTS scored its third No 1 on the main Billboard 200 album chart [p.5]

Kim held talks with Putin to gain nothing but the advice to give up nuclear weapons [p.6]

NK denounced Moons proposal for another summit [p.7]

Kim attended the testing of a newly developed guided tactical weapons system [p.8]

SKoreas economy in 1Q shrank in the biggest contraction since 2008 [p.9]

Government pledged to invest $26 bil to establish full-fledged 5G environment [p.9]

ADB and BOK slashed its growth outlook for SKorea's economy this year to 2.5% [p.10]

SKorea's sovereign debt hit record high of $598.9 bil, 38.2% of nation's GDP in 2018 [p.11]

Combined operating profit of 40 major listed firms is estimated at $13.3 bil in 1Q [p.12]

SEC revealed the specifications of worlds first commercial foldable smartphone [p.12]

Cho Yang-ho, Hanjin Group and Korean Air chairman, died from a lung disease [p.14]

Kumho Asiana Groups BOD decided on 15th to sell its core unit Asiana Airlines [p.14]

HHI started the procedure for corporate combination with DSME [p.18]

HHI turned into black in 1Q as ship prices rose and forex rates had favorable effects [p.21]

SHI has won 7 LNGCs worth $1.3 bil and one FPSO worth $970 mil so far this year [p.22]

DSME has been awarded a total of 13 newbuilds worth $2.31 bil so far this year [p.22]

Lee Soo-geun, new President of Daesun Shipbuilding was inaugurated on April 1st [p.22]

Merger between Sinokor MM and Heung-A Shipping will be finalised in Oct [p.23]

 

 

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