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KOREA REPORT - FEBRUARY, 2019.

OECD predicted that 2019 unemployment in SKorea could fall into the worst level in 18 years or more forecasting 4% jobless rate this year. OECD cited the drastic hike in the statutory minimum wage, manpower restructuring among manufacturers and the drop in the number of the people for production activities, aged between 15 and 64, for major factors. The jobless rate, which stood at 3.1% in 2013, rose to 3.8% in 2018. The number of jobless people increased to 1.073 mil, up 50,000 on-year.

Trump and Kim’s summit ended earlier than scheduled on 28th, with two sides failing to reach an agreement. Trump and Kim began second day of their summit at 9 am at the Sofitel Legend Metropole Hanoi hotel as scheduled, but the event was cut short, with the leaders leaving the venue at about 1:25 pm. They were originally scheduled to have a working lunch, and to hold a joint agreement-signing ceremony at about 2 pm, both of which were canceled and replaced with Trump’s press conference. “Basically they wanted the sanctions lifted in their entirety, and we couldn’t do that. They were willing to denuke a large portion of the areas that we wanted, but we couldn’t give up all of the sanctions for that,” Trump said. Trump took off from Hanoi at 3:47 pm, and began a telephone conversation with President Moon at 4:50 pm, which lasted for about 25 minutes. “President Moon suggested meeting in the near future to continue more in-depth talks, and President Trump agreed and said (related issues) should be discussed through diplomatic channels,” it added.

More than four out of 10 NKoreans are facing food insecurity with a third of its children unable to get minimum daily intake of food, indicating severe food shortages aggravated by years of natural disasters. About 10.9 mil people in NK are deemed "food insecure," which accounts for 43% of the North's total population.

SKorea's trade surplus came to $3.1 bil in Feb, marking 85 straight months in the surplus. Considering the average monthly trade surplus came to $5.9 bil in 2018, latest tally represents a noticeable drop. Export came to $39.56 bil, down 11.1% from $44.52 bil posted a year earlier, due to falling global prices of chips coupled with slowing Chinese economy. Imports decreased 12.6% over the period to reach $36.4 bil.

HHI is set to buy its local rival DSME, as SHI decided not to join the race to take over DSME. HHI and KDB will sign a formal deal in early March. Last month, the two signed a temporary deal. Under the deal estimated at over KW2 tril ($1.78 bil), KDB will hand over its DSME stocks to HHI and buy KW1.5 tril worth of HHI stocks to be issued later. The policy lender will also consider extending KW1 tril in financial help to DSME. In return, HHI will be split into two entities, with one to be listed on the market. HHI will also sell its stocks to KDB. Should the deal proceed as planned, HHI Holdings Co, parent of HHI, will hold a 26% stake in the new entity, with KDB owning 18%. KDB is expected to complete the deal in five to six months.

TOPICS.

An Iranian business group is seeking to seize the overseas assets of Korean firms [p.3]

The hydrogen industry will be the first beneficiary of SKorea’s deregulation efforts [p.4]

Government will suspend the operation of four of the six coal power plants [p.5]

OECD predicted 2019 unemployment in SKorea could fall into worst level in 18 years [p.5]

Trump and Kim’s summit ended earlier than scheduled failing to reach an agreement [p.7]

Kim traveled about 66 hours at around 67 km/h by train between Pyongyang and Dong Dang [p.8]

NK urged SKorea to separate inter-Korean relations from denuclearization issues [p.9]

More than 40% NKoreans are in food insecurity with third of its children unable to get min food [p.10]

SKorea's average growth forecast for 2019 by 9 major global investment banks stood at 2.5% [p.11]

SKorea's trade surplus marked 85 straight months in the surplus, but with a noticeable drop [p.11]

SK Group is close to taking the second spot from HMC Group by size of assets [p.14]

Samsung Electronics’ consolidated cash reserves reached KW104.21 tril as of end 2018 [p.14]

Samsung Electronics was placed among the top two in a brand rating by Best Brands France [p.14]

Hyundai Motor Group said on 12th that six of its vehicles have won the iF Design Award [p.16]

Total dividend payments by listed companies in SKorea likely to exceed $26.7 bil this year [p.17]

SKorea’s jobless rate hit a record high [p.18]

HHI is set to buy its local rival DSME to bring up orderbook from $6 bil to $12 bil [p.18]

KDB Chairman describes ongoing acquisition of DSME by HHI as ‘the last chance.’ [p.19]

Angelicoussis Group has ordered total of 104 ships from DSME since first deal in 1994 [p.22]

Jung Sung-Leep, CEO of DSME, has offered its resignation [p.22]

Hanjin HIC has made a settlement with banks in Philippines in regard to its debts [p.24]

The second bid for sale of Sungdong Shipbuilding has finally been rejected [p.24]

MOF of Korea is to support Korean operators to equip environmental equipment [p.24]

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