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Kang Seung-woo

Korea Times Business Reporter

Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.

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Companies

Youth unemployment posts sharp decline

By Kang Seung-woo Job market conditions for young jobseekers improved in June on the back of an economic rebound, a government report said Wednesday. Market watchers estimate that the trend is likely to gain momentum in the second half of the year. According to the latest figures from Statistics Korea, unemployment among those aged between 15 and 29 stood at 7.6 percent last month, down 0.7 percentage point from 8.3 percent a year ago. In addition, the jobless rate of those aged between 25 and 29, who take up a large portion among young jobseekers, was at 6.1 percent, down from 6.4 percent a year earlier. “The June reading of 7.6 percent is still high, but it is lower than that of last year. What we need to focus more on is the rate of those actively searching for jobs aged between 25 and 29 in terms of youth unemployment,” said Sohn Min-jung, a research fellow at Samsung Economic Research Institute. According to the report, overall youth employment notched 40.6 percent last month, but that of young people in the 25 to 29 age category registered 70.4 percent after s

Jul 13, 2011By Kang Seung-woo
Companies

Summer storm — delayed attack of PF woes

2-month stress tests likely to conclude that more savings banks need to be overhauled By Kang Seung-woo The financial malaise created by troubled savings banks has hit the local financial market hard, renewing fears that the nation might experience further economic woes in the near future. It still remains to be seen whether it is the harbinger of another financial storm that will travel across the industry. Observers say that the savings bank fiasco may shake the economy, if the current situation concerning the secondary lenders continues. Amid a prolonged property market slump, massive defaults by builders and property developers have led to a pileup of soured loans at savings banks, damaging their ability to cope with withdrawal demands. As a result, the Financial Services Commission (FSC) ordered eight savings banks including the sector’s giant Busan Savings Bank to stop doing business in January and February due to liquidity shortages. In addition, their preliminary financial reports, expected to be issued in August, are likely to show that more savings b

Jul 12, 2011By Kang Seung-woo
Companies

GS Caltex sets up Czech unit

By Kang Seung-woo GS Caltex, the country’s second-largest refiner, will build a polymer compounds producing factory in the Czech Republic to expand its overseas business portfolio, the company said Tuesday. The new unit, GS Caltex Czech, will be the first venture among local players in the central European country players, and will focus on producing and selling the functional plastics widely used in manufacturing cars and home appliances. GS Caltex plans to start constructing the plant in Karvina, some 293 kilometers east of Prague, later this year and expects to annual sales of around 100 billion won from 2014. “Based on our technology acquired from the oil refining industry, GS Caltex has tapped into the European petrochemical industry for the first time among Korean companies,” said a company official. Europe is one of the biggest markets for the product and demand has reached 1.2 million tons per year, the company noted. GS Caltex, headed by Chairman Hur Dong-soo, also entered the Chinese market in 2006. The firm, which built a plant with an annual productio

Jul 12, 2011By Kang Seung-woo
Companies

Savings banks told to raise BIS ratio to 8%

By Kang Seung-woo Financial regulators have told savings banks to raise their BIS capital adequacy ratio to 8 percent from the current 5 percent. The heightened rate reflects their determination to improve the troubled secondary banking sector. “While launching an inspection of 85 savings banks Monday that will take two months, the financial authorities also told the secondary lenders whose BIS ratio falls short of 8 percent to draw up measures to raise the ratio,” said an official of the Financial Services Commissions (FSC). The FSC, the nation’s financial regulator, has formed 20 special teams comprising 338 specialists including 182 from the Financial Supervisory Service (FSS) and 60 from the Korea Deposit Insurance Corp. (KDIC) to look into the financial health of the savings banks. It told major shareholders to strengthen the capital bases at their own expense by selling non-business related real estate or insolvent affiliates. The government generally imposes a BIS ratio of 5 percent, but the higher benchmark means it is getting tough during the inspection of t

Jul 11, 2011By Kang Seung-woo
Companies

Oilbank building BTX plant

By Kang Seung-woo Hyundai Oilbank has broken ground on a new 600 billion won ($567.6 million) BTX plant together with Japan’s Cosmos Oil in a coastal city 137 kilometers southwest of Seoul, Hyundai said Sunday. BTX, a main raw material for synthetic fiber, is a composite mix of benzene, toluene and p-xylene. The facility, scheduled for completion by June 2013 in Daesan, South Chungcheong Province, will be the company’s second BTX plant and will have an annual capacity of 1 million tons, which will elevate Hyundai Oilbank’s BTX yearly output to 1.5 million tons. The nation’s No. 4 oil refiner, an affiliate of global leading shipyard Hyundai Heavy Industries, currently operates a plant with an annual capacity of half a million tons. The Seoul-based refiner plans to sell the entire production from the new facilities to China, Taiwan and Europe amid surging prices and expects to rake in about a 1 trillion won profit per annum. “We expect to boost national competitiveness by exporting the total output from the new plant,” said Hyundai Oilbank CEO Kwon Oh-gap who took ch

Jul 10, 2011By Kang Seung-woo
Companies

Foreign firms more generous in dividends

By Kang Seung-woo Foreign-owned firms paid out large dividends last year, nearly more than double the average of all companies listed on the country's main stock market, a local fund market research institution said Sunday. Critics say that the penchant for high dividends might sap growth potential, given that companies paying them are averse to aggressive investments. According to an analysis of companies closing their books in December by FnGuide, the dividend payout ratio of foreign-owned firms stood at 29.5 percent in 2010, compared to a 16.25 percent average. The dividend payout ratio is the percentage of earnings paid to shareholders in dividends ― the higher the number, the larger the dividends given to shareholders. As of the end of December, there were 17 listed companies whose largest shareholders were foreign and 12 of them surpassed the average dividend payout ratio. Hankook Shell Oil, the Korean unit of global energy and petroleum heavyweight Royal Dutch Shell, topped the list of high dividend-paying corporations with an 86.24 percent payout ratio. K

Jul 10, 2011By Kang Seung-woo
Companies

FSC chairman has chronic habit of overpromising

Kim Seok-dong falls flat on Woori bidding, savings banks rescue, KEB sale By Kang Seung-woo When Kim Seok-dong took over the Finance Services Commission (FSC) as its chairman in January 2011, the old hand of the finance ministry was widely expected to act as a czar to impose belated changes to the financial community. After a little longer than six months on the job, Kim is closely listened to but few are as willing to believe his words as before. His track record tells it all. In all three initiatives he has launched from his powerful positions, Kim usually promised more than he could deliver, making him the butt of jokes among some in the financial sector. The latest was his repeated vow to attract at least two major financial groups to participate in the bid for the state-controlled Woori Financial. None took the bait. Well before the June 29 deadline, KB, Shinhan and Hana had expressed their intentions to stay away but Kim insisted that they would change track. Kim lost face and so did the authority of his office. He also shot himself in the foot over t

Jul 1, 2011By Kang Seung-woo
Companies

Chaebol family members reap W13 tril. in stock earnings

By Kang Seung-woo The owners and family members of the country’s top 30 conglomerates collectively earned 13 trillion won (about $12.18 billion) through the stock market over the past year, an Internet-based researcher said Friday. According to Chaebul.com, the market value of stock holdings owned by 118 members of corporate royalty stood at 53.93 trillion won as of the end of June this year, up 12.50 trillion won from 40.59 trillion won a year ago. When combining their earnings from stock dividends, which amount to 493.7 billion won, their new income over the year amasses to 12.99 trillion won. That is 3.3 trillion won more than the Defense Ministry’s budget for this year slated to strengthen the country’s weaponry in artillery, fighter jets and submarines. The average stock-holding member of a chaebol-owning family saw their gains from dividend income and valuation gains increase by 111 billion won over the year. The value of shares held by Hyundai Motor Group chairman Chung Mong-koo and his family increased by 3.79 trillion won, from 7.20 trillion won to 10.99 tr

Jul 1, 2011By Kang Seung-woo
Companies

Regulator may lower loan-to-deposit ratio to 90%

By Kang Seung-woo The nation’s financial regulator is considering requiring banks to downscale their loan-to-deposit ratio to 90 percent as part of efforts to defuse the problem of snowballing household debt, a senior official said Thursday. The ratio, a measurement of a bank’s financial health, represents the percentage of a lender’s loans against the amount of its deposits. The higher the ratio, the more the bank depends on borrowed funds. Thus, the increased ratio will likely, as its immediate effect, result in the strengthening of banks’ financial situations. “The government is considering lowering the ratio on a gradual basis,” said the official at the Financial Services Commission (FSC). The FSC plans to form a task force with the Financial Supervisory Service (FSS) and the Korea Federation of Banks in the near future. The move came one day after the government unveiled its comprehensive plans to rein in household debt, which topped 800 trillion won in the first quarter of the year. The regulator will press banks to lower their loan-to-deposit ratios to 90 p

Jun 30, 2011By Kang Seung-woo
Companies

European business to tap Korea en masse

By Kang Seung-woo The Korean economy is set to turn in tandem with the free trade agreement (FTA) between Korea and the European Union (EU) as it becomes effective on July 1. A majority of watchers say that the agreement will create a win-win formula for both parties. But some raise concerns that some Korean makers in such areas as vehicles and cosmetics will suffer hitches. In particular, state-run agencies welcome the free trade pact with great fanfare and rosy outlooks. The Korea Institute for International Economic Policy (KIEP) and the Korea Development Institute (KDI) expects Korea’s real growth domestic product (GDP) to post an average of 0.56 percent per year on pace for up to 5.62 percent over the next decades. Economic benefits are estimated to top $32 billion, accounting for 3.8 percent of the GDP, as well. Over the long term, the agreement will create about 253,000 jobs ― 220,000 in the service sector and 33,000 in the manufacturing industry ― on the back of increasing exports, according to state think tanks. Their rationale: the FTA will eventually boost

Jun 29, 2011By Kang Seung-woo
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