Auto, electronics companies likely to report better earnings in Q2

Investors are bracing for a flurry of second-quarter earnings results to be released by Korean firms starting this week. 

Eyes are on forecasts for the second half to see whether Korea would be able to sustain its growth momentum after its quick recovery from the global recession. 

Many of Korea’s auto and electronics makers are expected to post further improvements in their profits in the second quarter and third quarter, despite the global economic uncertainty stemming from the European debt crisis and monetary tightening, analysts said. 

Korea’s top 209 listed firms are expected to see their profit jump 61.9 percent to 22.9 trillion won ($18.6 billion) in the second quarter from a year earlier, according to data from local financial information provider, FnGuide. That would be a 15.6 percent rise from the previous quarter. 

Their operating profit is expected to climb to 24.5 trillion won in the third quarter, before dipping to 21.6 trillion won in the fourth quarter, according to FnGuide figures.

Opponents pile pressure on Lee over river project

Opposition parties and civic groups held a large-scale rally in Seoul on Saturday, stepping up their offensive against the controversial Four-River Restoration Project. 

The river plan, a key item on President Lee Myung-bak’s policy agenda, is expected to become the next big thing on the political scene here after opposition parties succeeded in impeding the parliamentary approval of the revised Sejong City plan last month.

The rally was organized by an alliance of representatives from five opposition parties, civic and religious groups, with an attendance of some 4,500 people, according to the government estimate. The rally organizers estimated the number of participants at about 20,000. 

Heads of opposition parties a candlelight rally against the Four-River Restoration Project in Seoul on Saturday. Yonhap News

Afghan mission starts despite attack

South Korea‘s team tasked with helping rebuild war-torn Afghanistan has begun its mission despite a rocket attack on its future headquarters, the Foreign Ministry said on Friday.

The Provincial Reconstruction Team went to work after a formal launching ceremony on Thursday, a day after the construction site of its headquarters came under a grenade attack. 

Ministry officials said they have to yet to uncover who was culpable, saying no individual or group has come forward.

The government suspects the Taliban as a possible culprit. 

The assailants fired two rounds of rocket-propelled grenades toward the base construction site on Wednesday, a Foreign Ministry official said. 

Col. Park Sung-woo, spokesman for the Joint Chiefs of Staff, said that both assailants and security guards used Russian-made RPG-7s in the exchange of fire. 

Troops of the “Ashena” unit dispatched to Afghanistan to protect Korean civilian workers salute during a ceremony to see them off on Thursday. Yonhap News

Mexico’s public projects open to Korean firms

MEXICO CITY -- Korean companies will be given bidding rights for Mexico’s public development projects, which are customarily limited to countries that have a free trade agreement with the Central American country. 

Negotiations for an FTA between Korea and Mexico began in 2007, but have been stalled since 2008 due to opposition from Mexican business circles.

President Lee Myung-bak requested his Mexican counterpart Felipe Calderon during their summit talks here on Thursday to let Korean companies take part in the bidding for Mexico’s infrastructure projects, Lee’s spokesperson Kim Eun-hye said. 

“The two leaders vowed to make joint efforts to resume the FTA talks, but we still need to wait for substantial progress,” Kim told reporters. “President Calderon said favorable conditions in various areas will be offered to allow Korean companies to participate in Mexico’s government procurement although it has not signed an FTA with Mexico.” 

Korean companies are mostly interested in Mexico’s oil refinery projects, including modernization of old refineries, Kim said. Mexico’s oil refinery-related orders amounted $2 billion between 2008 and 2009. 

Korean firms are also tapping bidding chances in cogeneration power plants and thermal power station projects.

President Lee Myung-bak and his Mexican counterpart Felipe Calderon on Thursday hold a joint press conference following a summit meeting in Mexico City. Yonhap News

Factional strife to highlight GNP race

Candidates officially registered Sunday to vie for the ruling Grand National Party’s top five posts, including the party leader.

A total of 13 GNP members have joined the race. The national convention to choose the five new members of the top decision-making Supreme Council for a two-year term will be held on Wednesday next week.

The competition is expected to be fiercer than ever as the new leaders would play a crucial role in nominating party members for the 2012 parliamentary elections and managing the party primary for the 2012 presidential vote.

The members will be chosen in a vote by some 9,060 local delegates, paired with the result of public opinion polls. The delegates’ votes account for 70 percent of the final decision while polls make up the rest. Of the five candidates who make it onto the Supreme Council, the one who garners the highest number of votes will become the new leader.

Before the convention takes place, a series of forums, in which candidates will present their respective visions of the party, will be held in major cities nationwide. Three televised debates are also scheduled.

Grand National Party floor leader Kim Moo-sung (center) receives a copy of the statement calling for fair management of the party’s leadership election from GNP legislators Sunday. Yonhap News

Top 30 firms’ debts twice cash assets

The debt of the nation’s top 30 conglomerates was twice as big as their cash assets, data showed on Sunday, raising concerns over their financial health.

The top 30 listed groups, except for state-owned firms and privatized public enterprises, posted 118.5 trillion won ($96.6 billion) of debts in total while 59.3 trillion won of cash, only 48.1 percent of their debts, was reported as of the end of 2009, according to data from chaebul.com.

The average debt ratio of the 30 firms also was 153.6 percent, the conglomerate information provider added.

Experts raised concerns over the firms’ rising debts as the government plans to implement exit strategy and the central bank to raise key interest rate as the country’s economic recovery speeds up.

“Companies with considerable amounts of debt could have to pay a lot of money if the interest rate goes up. And some companies would feel pressure in operating their businesses in the second half,” an analyst said.

Samsung, the country’s biggest conglomerate, had the biggest cash assets with 14.3 trillion won ($11.6 billion), followed by Hyundai Motor and SK with 7.5 and 5.8 trillion won, respectively.

P.M. Chung expected to offer resignation

Prime Minister Chung Un-chan was expected to tender his resignation to President Lee Myung-bak soon, taking responsibility for the failure to secure parliamentary approval for the contentious Sejong City revision bill.

Ever since saying last week that he would take complete responsibility for it, speculation has been rampant that he would offer to resign after Lee arrived in Seoul on Saturday from his weeklong trip to Canada, Panama and Mexico.

“It is right for me not to answer that question,” Chung said on Sunday in response to reporters’ question of whether he had talks with the president over his resignation.

(Yonhap)

NKorean killed for spreading Gospel: report

A news report said Monday that a North Korean was killed for spreading Gospel.

The Associated Press said Son Jong-nam was reportedly tortured to death for spreading the Gospel with 20 bibles and 10 cassette tapes in the reclusive state in 2009, 11 years after living in the neighboring area of China in 1998.

The wire said it obtained the information from his younger brother Son Jung-hun, who lives in South Korea.

South Korean Rev. Han Sang-ryeol, who entered North Korea without the official approval of the South Korean government, gives a sermon at a church in Pyongyang in North Korea on June 27. (Yonhap)

Choi Na-yeon wins LPGA title in playoff

South Korea's Choi Na-yeon claimed her third LPGA victory at the $1 million Jami Farr Owens Corning Classic in Sylvania, Ohio, on Monday, a news report said.

Choi Na-yeon of South Korea holds the winner's trophy after defeating Christina Kim, Song-Hee Kim and In-Kyung Kim on the second hole of a playoff during the final round of the LPGA Jamie Farr Owens Corning Classic golf tournament, Sunday, July 4, 2010 in Sylvania, Ohio. (AP-Yonhap)

With a birdie on the final hole, the 23-year-old joined the leading group including her fellow South Koreans Kim In-kyung and Kim Song-hee to go on to a playoff, according to Yonhap News.