The Korea Times

Trade deficit with Japan hits record high

By Kang Seung-woo Korea’s trade deficit with Japan reached a record high in the first half of the year due to a surge in imports of industrial components and machinery from the neighboring country. According to the Bank of Korea (BOK) and the Korea Customs Service Friday, the trade shortfall with Japan reached $18.07 billion in the first six months of 2010 as imports amounted to $30.9 billion, surpassing exports worth $12.83 billion. It was the first time for the nation’s six-month trade deficit to surpass $18 billion since it started trade with Japan after its liberation from colonial rule in 1945. It was also well above the previous record of $17.13 billion deficit set in the first half of 2008. The central bank said that after peaking at $17.13 billion in the January-June period of 2008, the deficit began to decline and fell to $12.44 billion in the first half of last year. Since then, the shortfall turned upward, with its quarterly deficit growing from $7.07 billion in the third quarter of last year to $9.18 billion in the second quarter of this year. The BOK s

Aug 13, 2010By Kang Seung-woo

Companies

Banks scrambling for China, Vietnam

By Kang Seung-woo With the global financial crisis fading, local banks are rushing abroad to get the upper hand in rapidly-growing emerging markets, particularly China and Vietnam, by re-charting their globalization strategies. There are two forces behind their aggressive expansion abroad. One is that profitability has been squeezed here as the local market has become saturated. The other is that retail markets in China and Vietnam looks promising as the countries are expected to see a surge in the wealthy middle-income class in line with a fast economic growth. Korea Exchange Bank (KEB) has recently joined the rush to the emerging markets after establishing its Chinese subsidiary in Tianjin on Aug. 2. Shinhan Bank plans to add two branches in Vietnam to accelerate the expansion race in the area. “Banks have overhauled their globalization strategies by pursuing localization in emerging markets. In the past, they focused on big cities in advanced countries to finance local companies operating there,” said an official of the Financial Supervisory Commission (FSC). “Follo

Aug 13, 2010By Kang Seung-woo

Companies

Youth unemployment rises for 2nd month

By Kang Seung-woo The nation’s job market is showing signs of a mild recovery as the economy continues to create more employment opportunities on the back of robust exports and investment. But employment polarization has been deepening as youth unemployment continues on an upward spiral. Statistics Korea announced Wednesday that the number of employed people reached 24.3 million last month, up 473,000 from a year earlier. The unemployment rate reached 3.7 percent in July, 0.2 percentage points higher than the previous month. The number of new employees was sharply up from the previous month’s 314,000. The employment growth provided a hint that the non-public sector has cranked up job creation, picking up where the government left off. Despite the recovery of the overall job market, prospects for young people aged between 15 and 29 stayed in the doldrums. The jobless rate for them increased to 8.5 percent in July from 8.3 percent in June and 6.4 percent in May. The number of employed youngsters also fell by 67,000. “The government will flex its muscles to come

Aug 11, 2010By Kang Seung-woo

Companies

Non-life insurers file most lawsuits

By Kang Seung-woo Non-life insurance companies went to the court most often in the first half of 2010 as they ranked the top in the number of lawsuits against consumers among financial institutions, a financial watchdog said Wednesday. In a report regarding financial firms’ legal action taken in the first six months of the year, the Financial Supervisory Commission (FSC) said that non-life insurers ranked first with 457 litigation cases It accounts for 90.1 percent of the total litigation filed by financial companies. The number of lawsuits brought by consumers was 38. The combined figures for banks, including savings banks and capital firms were 30, or 5.9 percent, to sit second, followed by life insurance companies with 18 and securities and investment firms with two. The FSC said that it came up with the results to help customers select financial companies and for the firms to gradually stop taking disagreements to court. It appears companies’ litigation is on the decline. On a year-on-year basis, the number of lawsuits went down 329 cases, or 37.6 percent,

Aug 11, 2010By Kang Seung-woo

Companies

Women are future growth engine: think tank

By Kang Seung-woo Women, once seen as supporters or bystanders in the community, are expected to step up as the key growth engine in the future thanks to their heightened economic status, a local think tank said. The LG Economic Research Institute said in its report Tuesday that women will take leading roles in changing the world in the future by actively participating in production, consumption and administration of organization. In addition, it said that those who have a good understanding of women will succeed. Since the global financial crisis in 2008, women have earned recognition in the labor market and entered enterprises for themselves. According to the report, the phenomenon is attributed to rising job opportunities afforded to them and income growth related with the former reason. Although there is still a 10 to 20 percent gap in the employment rate between men and women, it has reduced drastically thanks to the escalating employment of women aged between 20 and 30. There was an 18 percent gap in 1998 in the 27 nations of the European Union (EU), but it

Aug 10, 2010By Kang Seung-woo

Companies

POSCOs land acquisition in India on hold

Wrangling between central and local gov'ts to blame By Kang Seung-woo Despite its rapid development, India poses a great challenge to foreign investors. One example is Korea’s largest steel maker POSCO’s attempt to build a multi-billion dollar plant there. Once again, the project is caught in the wrangling among local villagers and the central government. POSCO’s plan to build a steel mill in India has hit a snag once again, as the Indian government has ordered the provincial authorities to temporarily stop all work related to the $12 billion project. The Ministry of Environment and Forests (MOEF) said Friday that the state government of Orissa had been directed to halt all the work including land acquisition on the steel maker’s project site because it violated the rights of forest dwellers. The government agency formed a panel to investigate the project. POSCO, which plans to build a steel plant with an annual capacity of 12 million tons in Orissa located on the east coast of India, signed a memorandum of understanding (MOU) with the state government in June 2

Aug 10, 2010By Kang Seung-woo

Companies

Shinhan, Samsung see biggest net profits

By Kang Seung-woo First-half net income of Korea’s credit-card companies dropped 8.7 percent compared to a year earlier, due to big losses by two major players, the financial watchdog said Monday. The Financial Supervisory Commission (FSC) said that the combined net earnings of six credit-card issuers totaled 895.3 billion won ($772.64 million) in the first six months, compared with 980.7 billion won over the same period a year ago. The result includes the losses of Hana SK Card, which spun off from its parent Hana Financial Group last November. Without Hana SK Card, the earnings reached 918.7 billion won, accounting for a 6.3 percent decline from a year ago. The FSC said that Samsung Card’s massive gap in profits between 2009 and 2010 and BC Card’s non-operating cost affected the figures. “In the second quarter of 2009, Samsung Card earned 130.5 billion won after selling its VISA Card stocks and non-performing loans,” an FSC official told The Korea Times. Samsung made 64.6 billion won from the sale of the stock and 40.9 billion won from the sale of the bad loa

Aug 9, 2010By Kang Seung-woo

Companies

Gold yields best return

By Kang Seung-woo Gold ranked top in returns on investment among moneymaking methods this year as risk-averse investors channeled more cash into the precious metal amid the sluggish real estate and equity markets. Daishin Securities, a local brokerage house, said Monday that the yellow metal yielded 8.06 percent so far this year, well above other investments, such as equity funds, real estate, foreign currencies, bonds and savings. According to the brokerage house, gold was traded at 170,500 won per “don” (3.75 grams) at the end of last year, but its price reached 184,250 won as of Aug. 5, up 13,750 won or 8.06 percent. Gold has historically proven to be a safer investment asset compared with equities and real estate. Daishin said that gold prices have been on an upward trend due to investors’ flight for safety assets due to lingering uncertainties overhanging the global economy. The European financial crisis, sparked by Greece’s sovereign debt problem, was a major trigger to reignite investors’ appetite for gold, as it is seen as a way to hedge against such risks. Wi

Aug 9, 2010By Kang Seung-woo

Companies

Card industry facing uphill competition

By Kang Seung-woo Since the major credit card fiasco in 2003, the local card industry has remained relatively low key as many financial groups have placed their card operations under their umbrella in order to fix their balance sheets and avoid excess competition. The landscape for the industry, however, is expected to change down the road, with major financial groups now moving to spin off their card divisions in a bid to strengthen the plastic-issuing credit business. KB Financial Group announced on July 30 that it will separate the credit card business from its banking unit, while other holding firms and financial institutions are seriously considering entering the sector which is already nearing saturation. However, their entry into the card business has been fueling concerns over the possible reoccurrence of the credit-card crisis of 2003, which involved more than three million people defaulting on their credit cards. The announcement of the nation’s largest financial company by assets has kept rivals on their toes. According to the industry, Shinhan Card was t

Aug 8, 2010By Kang Seung-woo

Companies

Banks deposit interest rate rises up to savings

By Kang Seung-woo Savings banks are in a lurch over an increase in project financing (PF) or property loans that have gone bad. The growing rate of soured PF is in turn aggravating their cash flow, failing to offer competitive interest rates for deposits. This is being worsened by regular banks, which are raising their rates for deposits. According to the Bank of Korea (BOK) and industry sources, regular banks are now offering interest rates for deposits comparable to those at savings banks. As a matter of fact, the interest gap is the narrowest in 10 years. A few savings banks’ deposit rates are even lower than those of banks because they can’t offer better rates, constricted by the need to restructure delinquent loan assets. According to the BOK, the average interest rate of a one-year fixed deposit was 4.24 percent at a savings bank in June. The rate is just 0.52 percentage points higher than what the regular banks were offering. Savings banks typically offer higher deposit rates by 1 percentage point or 2, but since March, the gap has been reduced from 1.27 to

Aug 6, 2010By Kang Seung-woo

Kang Seung-woo

Read more

Trade deficit with Japan hits record high

Banks scrambling for China, Vietnam

Youth unemployment rises for 2nd month

Non-life insurers file most lawsuits

Women are future growth engine: think tank

POSCOs land acquisition in India on hold

Shinhan, Samsung see biggest net profits

Gold yields best return

Card industry facing uphill competition

Banks deposit interest rate rises up to savings

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