T : +82-31-702-1397
F : +82-31-706-1390
E : hwangnco@hwangnco.com
H : www.hwangnco.com
KOREA REPORT - APRIL, 2023.
TOPICS.
President
Yoon Suk Yeol arrived in Washington on 24th for a six-day state visit expecting to strengthen the allies' response to NK's nuclear
threat and other challenges in a symbolic year marking the 70th anniversary of
the alliance. Leaders of SKorea and the
US adopted a declaration to strengthen extended deterrence against provocations
from NK at their summit on 26th, in an agreement that formalized
consultations with Seoul on the decision making process. Under the Washington
Declaration, SKorea and the US will launch a nuclear consultation group as a
new mechanism to focus on nuclear and strategic planning issues. Read more¡¦
SKorea
on 24th put Japan back on its "white list" of trusted trading
partners, three years after the removal.
Ministry of Trade, Industry and Energy issued a revision to its public notice
on exports and imports of strategic items, allowing companies to enjoy shorter
period of time for review and simpler paperwork. The move raised number of
nations given preferential treatment in trade to 29, which includes the US,
France and Britain. Japan lifted curbs on exports to Seoul of three materials
in March, fluorinated polyimide, photoresist and hydrogen fluoride, that are
critical for production of semiconductors and displays, which had been in place
since 2019.
Local
governments and private companies in SKorea have been ramping up efforts for
the country's bid to bring the World Expo to Busan in 2030. Hosting the 2030 World Expo has been a long-standing goal for
Korea, who started on the path to candidacy in 2014. In 2019, the bid for the
World's Fair was designated as an important national project, prompting the
establishment of a joint public-private bidding committee, which has been up
and running since last year. Read more¡¦
SKorea's
national debt is growing at an alarming pace, posting a record high of over
KW1,067 tril ($811 bil) last year, Finance Ministry said
on 4th. The figure has been increasing by around KW100 bil won every year,
surpassing KW600 tril in 2016, KW700 tril in 2019, KW800 tril in 2020 and KW900
tril in 2021. The debt to GDP ratio has reached 49.6% last year. The assets
totaled KW2,836 tril last year, down KW29.8 tril on-year. This was the first
time for the asset to decrease since 2011.
SKorea
logged trade deficit of $2.62 bil in April,
staying in the red for 14th month. Outbound shipments decline 14.2% on-year to
$49.6 bil, as the chip industry experienced worst slump of sagging demand and
prices. Inbound shipments also decreased by 13.3% on-year to $52.23 bil. In
April, exports of automobiles and ships increase by 40.3% and 59.2% on-year,
respectively. However, outbound shipment of chips fell by 41% and exports of
display and steel products also decreased by 29.3% and 10.7 %, respectively.
PERFORMANCE OF FIRST QUARTER
SKorea's
foreign reserves came to $426.67 bil in April, up
$610 mil on-month, as dollar's descent increased conversion value of holdings
in other currencies, according to Bank of Korea. Foreign securities was valued
at $374.3 bil as of end-April, down $3.25 bil on-month, which accounted for
87.7% of foreign reserves. SKorea ranked as world's ninth-largest holder of
foreign reserves as of end March.
SKorea's
consumer prices rose 3.7% on-year in April, on
falling global oil prices, the latest signal that inflation has receded,
according to Statistics Korea. It is the first time in 14 months that the
on-year inflation growth fell below 4%. Prices of petroleum products fell 16.4%
on-year, marking the sharpest decline since May 2020. The prices of
agricultural, fisheries, and livestock products rose 1% on-year. Those of
utility services climbed 23.7% on-year. Core inflation rose 4.6% on-year in
April.
Hanwha Group has
successfully overcome the last obstacle in its acquisition of DSME, receiving
final approval from SKorea's Fair Trade Commission. On 27th, FTC announced
conclusion of its final review of Hanwha Group's acquisition of DSME. FTC
granted approval for five Hanwha Group subsidiaries, including Hanwha Aerospace
and Hanwha Systems, to acquire a 49.3% stake in DSME. This approval is
contingent with specified corrective measures designed to prevent unfair and
discriminatory practices, such as unjustly estimating price of ship-mounted
equipment, refusing competitors' requests for technical information related to
ship-mounted equipment in defense acquisition projects and sharing confidential
information obtained from competitors with affiliated companies. Read more¡¦
HD KSOE reported
first-quarter results for 2023, which included KW4.824 tril ($3.661 bil) in
sales, KW58.5 bil in operating profit, and a net loss of KW81.1 bil. In
comparison to 4Q 2022, sales dropped by 2%, and operating profit fell by 50%.
Despite ongoing net losses, they decreased by 62% from KW212.3 bil in the
previous quarter. Compared to first quarter of 2022, sales grew by 24% and
operating profit shifted from a loss of KW396.4 bil to a surplus. The net loss
experienced a significant 72% reduction from KW293.2 bil. HD KSOE attributed
the performance to an increase in construction volume and commencement of sales
for high-value-added ships, such as LNG carriers.
There is
resurgence in performance of mid-sized SKorean shipbuilders, driven by
increased demand for replacing aging vessels. In first quarter,
these shipbuilders more than doubled their performance compared to same period
last year. According to KOSHIPA, mid-sized SKorean shipbuilders' order volume
reached 291,905 cgt, up 131% on-year. DH Shipbuilding secured 5 units (150,695
cgt), HJ Shipbuilding & Construction secured 2 units (92,218 cgt) and K Shipbuilding
secured 2 units (48,992 cgt). Read more¡¦
CLICK
HERE to read ¡¶Korea
Report - April 2023¡· in a
FLIPBOOK.
-------------------------------------------------------------------------------------------------------
ATTACHMENT: Korea Report - April 2023 (PDF FILE)
Please let us know if you have difficulty opening the file.
