Korea to curb foreign currency loans

The Bank of Korea will restrict banks from giving foreign currency loans to local companies for domestic use from July 1, as part of efforts to protect the local market from big swings in foreign exchange rates.

The plan is part of a set of regulations aimed at reducing Korea’s dependence on short-term foreign borrowings which exposes the market to volatility in times of crisis. 

“We expect to lower short-term foreign debt and reduce local companies’ exposure to currency risks,” the BOK said in the statement. 

New rules allow banks to roll over foreign currency loans to local companies only if those firms can’t raise funds overseas. Foreign currency loans increased $2.19 billion between January and April this year to $22.53 billion, the central bank said.

Foreign exchange analysts say the move is related to China’s recent decision to ease the yuan’s peg against the U.S. dollar which may push the won to appreciate accordingly.

Bank of Korea Governor Kim Choong-soo (second from right) meets financial experts in Seoul on Wednesday. Yonhap News

U.S. embassy holds Sijo contest

“Sijo” has been the most popular poetic form in Korea for centuries. Like haiku and tanka, its roots are in ancient Chinese verse.

To explore this ancient poetic form, the U.S. Embassy organized an English Sijo Writing Contest with 22 Korean high school students who are fluent in English and have a strong understanding of the traditional form.

The contest was arranged similarly to that of the state civil service exams given during the Goryeo and Joseon Dynasties. 

High school students brainstorm ideas for the U.S. Embassy’s English Sijo Writing Contest related to the main theme of “hope.” Courtesy of U.S. Embassy

Ruling camp refuses to back down on Sejong

Despite a parliamentary panel rejection and escalating public criticism, Lee Myung-bak does not appear ready to give up on his bid to kill a former government-led plan to relocate part of the administration out of Seoul. 

In a meeting with high-ranking government officials and ruling party leaders Wednesday, Prime Minister Chung Un-chan asked the National Assembly to bring the controversial bills related to revising the Sejong City project up again for a full-house vote, claiming “such a historic issue” deserves attention from all legislators. 

The 31-member Assembly committee on land and maritime affairs voted down the bills Tuesday, thwarting Lee’s determination to overthrow his predecessor’s project that aimed to develop a second administrative city in the long-underdeveloped Chungcheong region.

First sought by the administration of Roh Moo-hyun in 2005, the project -- named after the creator of the Korean alphabet -- is widely popular among residents of the province as well as progressive political forces who support balanced regional development. 

Prime Minister Chung Un-chan (third from left) and other Cabinet members attend a meeting with ruling party leaders Wednesday. Yonhap News

Korea’s import market shifts focus

As imported automobiles become increasingly commonplace in Korea, the market is shifting towards smaller, cheaper vehicles.

According to the Korea Automobile Importers and Distributors Association, vehicles equipped with between 2- and 3-liter engines account for 43.3 percent of the market for the first five months of the year.

In comparison, such vehicles took up 35.8 percent of the market in 2008 and 38.4 percent in 2009.

As the volume of such vehicles sold increase, mid-sized vehicles are also dominating the top 10 bestseller list.

For the first five months of the year, eight of the top 10 bestsellers were those with engine capacities between 2 and 3 liters with the Mercedes-Benz E300topping the list.

In both 2009 and 2008, only six such vehicles made it into the top 10 list. 

The Mercedes Benz E300 (top) and the Toyota Camry, the two bestselling imported cars for the first five months of the year.

Saab hires Ferrari designer Castriota to speed turnaround

Jason Castriota, the U.S. designer known for creating the Ferrari P4/5 and Maserati GranTurismo, will head Saab Automobile’s design team to help the Swedish carmaker take on Bayerische Motoren Werke AG and Audi AG.

Jason Castriota

The first assignment for Castriota’s design firm is to create an upscale version of Saab’s current 9-3 model, scheduled for release in 2012, the 36-year-old said in an interview. Aerodynamics will be a focus of the new design, he said.

“It’s absolutely vital we get this car right,” Castriota said from New York late yesterday. “This is Saab returning to its roots, not having to worry about being part of a much larger machine that they were before in the GM organization.”

Saab, sold by General Motors Co. to Dutch supercar maker Spyker Cars NV in February, aims to become profitable by 2012. The turnaround strategy includes releasing premium models more distinct and sporty in their design than when Saab was under GM, according to Spyker Chief Executive officer Victor Muller.

Popular new cars boost Kia Motors

Kia Motors Corp. is giving the country’s dominant carmaker Hyundai Motor Co. a run for its money in the domestic market.

Fueled by the popularity of recently launched vehicles such as the mid-sized sedan K5 and the compact sport utility vehicle Sportage R, Kia’s share of the monthly domestic market rose to 34.5 percent in May.

Last month’s figure is the second highest recorded since Hyundai acquired controlling shares of the company in 1998. The highest monthly market share for Kia since the takeover was 35 percent recorded in November 2008.

As its market share rises, Kia vehicles are eating into sales of rival models produced by the company’s sister carmaker Hyundai Motor Co.

Last month, Kia’s K7 full sized sedan outsold the Hyundai Grandeur by nearly 1,000 units, while the Sportage R compact sport utility vehicle also outpaced its Hyundai counter part by similar margins.

With the launch of the K5 last month, Hyundai Sonata’s monthly sales figure fell below 10,000 units for the first time since its launch last September. 

Kia Motors Corp.’s K Series vehicles — K5 and K7 — that are leading Kia’s rapid rise in the domestic market. (Kia Motors Corp)

LS to supply GM with hybrid car parts

LS Industrial Systems Co., a Korean electric equipment maker, agreed to supply components for General Motors Co. hybrid cars.

LS Industrial and GM will form a long-term partnership, the Korean company said in an e-mailed statement today without disclosing financial terms. 

LS Industrial also said it aims to win at least 1 trillion won ($842 million) in orders from its green car parts business by 2013.

Foreign workers’ average pay below lowest of locals’

The average annual salary of foreign workers in Korea came in far below that of the lowest 10 percent local workers, reflecting the group’s concentrated engagement in poorly paid jobs.

An analysis by the National Tax Services said a total of 344,583 foreign workers earned 4.54 trillion won ($3.75 billion) in 2008. It was an 18.7 percent increase from the figure in 2007 but fell short of the population jump of 22.2 percent over the year. Foreign workers who filed for tax returns in 2007 totaled 282,640.

The average annual salary of the group was 13.17 million won in 2008, 1.43 million won less than that of the lowest 10 percent local workers. Foreign workers in 2008 earned 2.9 percent less on average than they did in 2007. 

New KB chief faces tough challenges

The arrival of a strong leader is generally a boost for a company’s value, particularly when it comes after months of management crisis. 

At KB Financial Group, however, the nomination of Euh Yoon-dae as chairman seemed to have brought more turmoil than relief that a nine-month-long management vacuum is finally over. 

Shares in the nation’s top financial group shed about 4 percent since the announcement and the firm’s labor union is questioning the credentials of the chairman-nominee. 

Shares in KB Financial were trading at around 49,100 won ($41) on Wednesday, compared to 51,200 won, the closing price on June 15 when KB Financial announced Euh as its new leader and the chairman-nominee expressed his intention to acquire Woori Financial Holdings. 

Provoking such responses were Euh’s remarks, made shortly after the announcement of his nomination, on what is the most sensitive issue in the Korean banking industry now – M&As and mega banks. 

Euh Yoon-dae Kim Myung-sub/The Korea Herald

Euh said that he was considering buying Woori or Korea Development Bank -- both expected to be privatized -- in order to create a mega bank that can compete globally. 

“The Korean banking sector lags behind in competitiveness on the global stage and it is often suggested that the country needs a large bank, which would rank within the world’s top 50,” he has said after winning the nomination. 

He also said he was not interested in Korea Exchange Bank, smaller than Woori, which is currently being put up for sale by U.S. private equity fund Lone Star. 

KB Financial owns Kookmin Bank, the country’s No. 1 commercial lender with assets of 273.8 trillion won. Woori, a wholly-owned unit of state-controlled Woori Financial Holdings, is the second largest with assets of 239.7 trillion won.

LG to invest W1tr in solar batteries

LG Electronics plans to invest 1 trillion won ($828.5 million) in the solar battery business for the next five years leveraging its high-end electronics technology to break into the sharply growing market. 

The company held a ceremony Friday to mark the completion of its first production line of solar cells and modules in Gumi, North Gyeongsang Province. 

The facility, remodeled from its PDP assembly line, has a 120 megawatt capacity. 

The company plans to add another line to double the capacity by the end of the year and aims to become one of the world’s largest makers with a capacity of 1 gigawatt within three years.

“LG Electronics will position itself as a leading player in the market for green energies that are spotlighted as the next-generation of alternative energy,” Nam Yong, company chief executive officer, said in his congratulatory message. 

LG Electronics CEO Nam Yong (third from left), chief technology officer Paik Woo-hyung (fourth from left) and other participants cut the tape at a ceremony marking the completion of its first production line of solar cells and modules in Gumi, North Gyeongsang Province, Friday. LG Electronics

KOICA projects raise hope in the Philippines

AURORA. Philippines – KOICA’s projects in the Philippines are being well-received in all levels of society. 

“The Philippines have in the past given Korea high-productivity rice strains to Korea, and Korea is now returning the favor,” Aurora Governor Bellaflor Angara-Castillo said.

“Aurora Province developed the rice processing center as a tourist attraction as a token of thanks to Korea.”

She is a veteran politician who has served as a senator three times, and is from one of the 12 families at the center of Filipino politics.

Aurora Governor Bellaflor Angara-Castillo

GS Caltex to start new refinery in Sept

GS Caltex Corp., Korea’s second-largest oil refiner, said Tuesday it will begin mass production at its new refinery in September. 

The company held a ceremony to mark the completion of the 2.6 trillion won ($2.2 billion) plant that converts heavy oil into transportation fuels such as gasoline. 

The facility will be capable of processing 60,000 barrels of heavy oil per day, increasing GS Caltex’s daily capacity to 215,000 barrels from the current 155,000 barrels. 

GS Caltex is a 50-50 joint venture between GS Holdings Corp. and Chevron Corp., the second-largest U.S. oil company.

GS Caltex’s new plant in Yeosu, South Jeolla Province GS Caltex

Samsung aims to double its share in smartphone market

Samsung Electronics, the world’s second-largest mobile-phone maker, aims to more than double its share of the smartphone market, helped by the introduction of its Galaxy S model. 

Samsung intends to raise its market share for smartphones to more than 10 percent in the fourth quarter from its current level of less than 5 percent, Lee Donjoo, senior vice president of company’s Mobile Communications Division, said in an interview in Seoul on Tuesday. 

A 10 percent market share may lift Samsung’s ranking among smartphone makers to fourth from fifth, surpassing Taoyuan, Taiwan-based HTC Corp., which had a 7 percent share in the fourth quarter of 2009 according to an April 20 CLSA Ltd. report. Nokia Oyj, the largest smartphone maker has a 40 percent share. Global sales of smartphones will rise 36 percent to 247 million handsets in 2010, research firm ISuppli Corp. said in April. 

“Samsung may easily meet the target as the handset market is sharply transferring to smartphones and the hardware features of the Galaxy S are pretty competitive in the market,” said Lee Sun Tae, a senior analyst at Meritz Securities Co. Ltd. in Seoul. 

The 11 people who received Galaxy S smartphones first pose at Samsung Electronics on Tuesday. Samsung Electronics

Assembly panel rejects revised Sejong City plan

A parliamentary committee Tuesday voted down President Lee Myung-bak’s revision aimed at killing a former government-led project to relocate part of the government out of Seoul, thwarting the conservative leader’s determination to further pursue growth-focused policies in the latter-half of his term. 

A long-standing cross-party pledge sought by the administration of Roh Moo-hyun in 2005, the so-called “Sejong City” project was envisioned to develop a second administrative town in the long-underdeveloped Chungcheong region. 

The purported city, named after the creator of the Korean alphabet, is widely popular among residents of the province as well as progressive political forces who support balanced regional development.

Shortly after taking office two years ago, Lee, a former CEO and strong believer of the market economy, created a revised plan to build instead a corporate-oriented city in the region, creating a voter backlash that led to the ruling party’s crushing defeat in the June 2 local elections.

(Yonhap)

S. Korea advances to World Cup's 2nd round

JOHANNESBURG, South Africa -- South Korea booked its place in the second round of the 2010 World Cup with a 2-2 tie with Nigeria in Durban on Tuesday evening to go past the first round for the first time ever away from Asia.

South Korea's Lee Jung-soo, center, celebrates after scoring during the World Cup Group B soccer match between Nigeria and South Korea at the stadium in Durban, South Africa, Tuesday. (Yonhap News)

Korea finished second in Group B behind Argentina and take on Uruguay on Saturday in Port Elizabeth with a place in the quarterfinal at stake.