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KOREA REPORT - SEPTEMBER, 2018.
Declaring a formal end to the Korean War will
encourage NK to move further down the path toward complete denuclearization, while economic cooperation with the
North will keep NK from turning back, President Moon Jae-in said on 25th,
speaking before a group of some 200 UN opinion leaders. Moon insisted that
formally ending the 1950-53 war will not affect the SKorea-US alliance. Moon¡¯s remarks came one day after he held a meeting with President Donald Trump
to explain the outcome of his trip to Pyongyang for his third summit with Kim
Jong-un, in which Kim agreed to take additional denuclearization steps in
exchange for corresponding measures from the US. Moon earlier said the
corresponding measures could, or should, include a formal end to the Korean War
that would provide some security assurances to the North. Moon has said a
formal end to the war will only be a political declaration and that a peace
treaty can be signed only after the North completely denuclearizes.
President Moon and Kim Jong-un kicked off their historic summit on
18th in hopes of reviving the stalled
denuclearization talks between the US and NK. Among items on the agenda were
denuclearization, inter-Korean relations and ways to ease military tensions
along the border. Meeting face-to-face again after their previous summit on May
26, the two leaders expressed hopes of achieving meaningful results at the
meeting. Kim credited Moon for improving inter-Korea and Washington-Pyongyang
relations. Prior to the visit, Moon had stated that his goal was not necessarily
to sign a new agreement, but to establish ¡°permanent peace¡± on the Korean Peninsula. Moon is being accompanied by some 110
delegates consisting of government officials and a special entourage of
business tycoons, cultural figures and civic group leaders. This marks the
third inter-Korea summit since Moon took office last year. The two previous
meetings were held April 27 and May 26 in the border village of Panmunjom. Moon
is also the third South Korean president to have held a summit with a North Korean
leader, with former presidents Kim Dae-jung and Roh Moo-hyun meeting in 2000
and 2007, respectively, with the Kim Jong-il, Kim Jong-un¡¯s now-deceased father.
While the two Koreas took a significant first step, the Pyongyang
Declaration is missing some of the key demands from the US, such an inventory of its nuclear program. There was also no
mention of the North giving up its stockpile of ballistic missiles and nuclear
warheads. In addition, agreement on economic cooperation cannot be implemented
without the lifting of UN sanctions against NK.
NK on 4th lashed out at the US for standing
in the way of the two Koreas¡¯ efforts to improve inter-Korean
relations. Rodong Sinmun
carried a commentary titled ¡°Blocking NKorea-SKorea relations is
blocking the US¡¯ own road ahead.¡± It called upon SKorea to pursue inter-Korean projects without being
influenced by the US. ¡°How can we understand the US, which said it
supported the Panmunjom Declaration yesterday but is showing a contradictory
attitude today?¡± the newspaper asked. ¡°Why is the US overreacting to the advancement of NKorea-SKorea relations
like that?¡± ¡°The driving force for NKorea-SKorea
relations is within our people, and the pace of advancement of those relations
is up to a timeline we set,¡± the commentary said.
SKorean Prime Minister Lee Nak-yon urged BOK to raise key interest
rate, citing concerns about financial
instability. ¡°Without a rate
hike, problems related to capital flight, a widening gap in interest rates
between Korea and the US and the upward pressure on the level of household debt
will persist,¡± said Lee. Lee
also blamed expansionary monetary policy during the former Park Geun-hye
administration for the faster pace of household debt growth. BOK Gov Lee Ju-yeol called such remark by
the official ¡°inappropriate,¡± as they make an impact on the market and undermine neutrality
in monetary policy decision, in press briefing on Aug 31st after
its decision to freeze the rate at 1.5% for nine consecutive months in Aug.
SEC ranked seventh in global brand based on
marketing consultancy Prophet's annual brand relevance survey. SEC's ranking is up three notches from
last year and the highest among non-American brands. SEC has also made the top
10 list for the fourth consecutive year. SEC is also the sole Asian company
that has ranked among the top 10 most relevant brands in the World's largest
economy. Prophet conducted a survey of 12,694 US consumers about 299 brands
across 37 industries, measuring across four brand principles: customer
obsession, ruthless pragmatism, pervasive innovation and distinctive
inspiration.
HMM, on 28th, finalized
ULCs newbuilding contracts with Korean Big3 yards. To buy 20 containerships,
HMM is spending a total of KW3.1532 tril (abt $2.84 bil), and the contract
lasts from Sept 28, 2018, to June 30, 2021. All the 20 ships will be built to
LNG-ready design and be equipped with SOx scrubbers. On June 15, HMM signed
LOIs with the Big3 for eco-friendly containerships. HMM ordered 7 x 23,000 teu
ships at DSME (abt $154 mil each), 5 x 23,000 teu at SHI (abt $153 mil each),
and 8 x 15,000 teu at HHI (abt $121 mil each). Korea Ocean Business Corporation
is providing financial support for the vessels.
SKorea¡¯s third largest conglomerate SK Group is
moving to shed its shipping business, SK Shipping Co, amid worsening financial
conditions of the unit and the government¡¯s regulations on intra-affiliate
transactions by large business groups. SK Holdings Co is reportedly seeking to
sell a majority of its stake in SK Shipping to local private equity firm Hahn
& Co for an estimated KW1.5 tril ($1.3 bil). Founded in 1982 as Yukong
Shipping, SK Shipping was once the nation¡¯s fourth largest container shipper
following Hanjin Shipping, HMM and STX Pan Ocean during the industry boom until
the mid-2000s.
TOPICS.
President Moon explained his talk with NK¡¯s Kim Jong-un at UN
[p.2]
President
Moon addressed on Japan¡¯s wartime ¡°comfort women¡± at UN General Assembly [p.3]
SKorea
launched JV and public sector committee for hydrogen economy [p.3]
President
Moon and Kim Jong-un held their third summit in Pyeongyang [p.5]
Pyongyang
Declaration is missing some of the key demands from the US [p.7]
NK lashed out at the US for standing in the way of
inter-Korean relations [p.8]
BOK Gov
Lee called PM Lee¡¯s request to raise key interest rate ¡°inappropriate¡± [p.9]
Steep rise in debt for self-employed people becomes a
ticking time bomb for the economy [p.10]
SKorea's top 10 conglomerates slashed donations by 14.5%
in the past two years [p.11]
Samsung Electronics ranked seventh in global brand [p.11]
Chung
Eui-sun will be able to wield greater power across 55 affiliates of Hyundai
Motor [p.12]
SK hynix
was picked as the sixth-most valuable SKorean brand in 2018 [p.12]
Korea Gas is to operate a pilot project involving 400-HP
LNG trucks [p.13]
HMC and Kia Motors sold a combined 111,406 units in the
US in Aug [p.14]
Daily stock trading on SKorean bourse has recovered from
jitters by US-China trade dispute [p.15]
The value of the JYen is expected to further weaken against
the Kwon [p.16]
HMM finalized ULCs
newbuilding contracts with Korean Big3 yards aiming 1 mil teu era [p.17]
Korean shipbuilders
took 88% of global LNGC orders and 87% of VLCC orders in Jan-Aug [p.17]
STX O&S secured
R/G for two 50K MR tankers awarded by OceanGold Tankers [p.20]
SK Group is moving to
shed its shipping business, selling SK Shipping [p.21]
KEB Hana Bank to
provide financial support to shipping industry [p.21]
MOTIE will build 100
LNG-powered ships, establish 5 LNG bunkering facilities by 2025 [p.22]
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