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ECONOMY

Korea ranks fifth in foreign exchange reserve holdings

Korea ranks fifth in the world for the amount of foreign exchange reserves held said the Korea Trade-Investment Promotion Agency (KOTRA) Jan. 12th, citing a Hong Kong report of standings made in December of last year.

KOTRA said that the Korean government held $96.2 billion in foreign reserves as of the end of last year, ranking in fifth place worldwide behind Japan, China, Hong Kong and Taiwan. Japan stood in first place with $354.6 billion. China came second with $163.9  billion, and Hong Kong followed with $107.5 billion. Taiwan came in fourth with $106.7  billion. After Korea was Germany with $86.6 billion. Singapore came seventh with $78.1 billion as of November. The United States ranked eighth with $66.6 billion, and France came next, with $64.5 billion.

World finance leaders positive on Korean restructuring

Top financiers hold a positive view of South Korea's current economic restructuring efforts, a presidential aide said Jan. 26th upon his return from a mission to the United States.

Lee Ki-ho, chief economic adviser to President Kim, Dae-jung, said that senior officials of the International Monetary Fund (IMF) and the Federal Reserve Board (FRB) particularly noted the recent drive to privatize the state utility and the ongoing bank mergers as  positive outcomes of the government's restructuring program.

"Both the IMF and the FRB suggested, however, that South Korea pursue a more intense restructuring program to make its economy more transparent if it is to attract foreign investment," Mr. Lee said.

Mr. Lee returned from the U.S. after an eight-day trip, during which he met heads of American and world finance organizations. Mr. Lee went to Washington as a special envoy of President Kim for U.S. President George W. Bush's inauguration. He carried eight personal letters from Mr. Kim to the new American president.

POLICY

Panel to Push for ¡®E-government¡¯

President Kim Dae-jung will appoint a new committee to promote "e-government," officials said Jan. 26th. The panel will consist of 15 government officials and civilian experts, and will spearhead efforts to have all government documentation and purchasing electronically based by next year.

Chong Wa Dae spokesperson Park Joon-young said the "E-Government Special Committee" is being formed in line with the president's intentions. Mr. Kim, a strong advocate of information technology, has said he would make the promotion of e-government and e-commerce a priority policy.

"The Korean economy should be supported by the development of information technology and bio-technology in tandem with traditional manufacturing industries," Mr. Kim said. "The promotion of e-business will also help increase transparency in both the government and the private sector."

Mr. Park said President Kim believes that the promotion of e-business in the government sector would contribute to his efforts to battle corruption and achieve an "electronic democracy."

The spokesman said the envisaged panel would encourage the central and local governments to implement the electronic management of public records and data to enable "paperless" handling of businesses.

It would also call for government agencies to expand e-commerce in purchasing, so-called "B2G (business to government)" commerce.

INVESTMENT

Korea ranks as Asia's third largest M&A market

Korea ranked as Asia's third largest market for mergers and acquisitions (M&As) last year, according to a report released Jan. 17th. According to Thomson Financial, a leading provider of financial information and services, Korean M&As amounted to $26 billion in 2000, accounting for nearly  14 percent of total Asian volume.

Hong Kong ranked first, announcing deals worth $57 billion last year and accounting for 30.5 percent of all Asian deals. China was the  runner-up with $44 billion, or 23.5 percent of the Asian total. Meanwhile, the value of M&A deals executed in Asia last year jumped to $187 billion, up 77 percent from 1999, Thomson said. Broken down by industry, deals in the telecommunications sector claimed 45 percent of the region's total, followed by the electronics sector and real estate.

The region's advisers ran a tight oligopoly, with JP Morgan accounting for 28.9 percent of the deals, followed by Goldman Sachs with 27.8 percent and Merrill Lynch, 25.67 percent.

130 to 140 companies set to join KOSDAQ this Year

As many as 140 companies are likely to be listed on the KOSDAQ this year, with the  over-the-counter market showing signs of rallying from last year's slump, the Financial Supervisory Service said Jan. 22nd.

"About 180 companies are expected to apply for listing on the OTC market this year," the financial watchdog said. "Of the total applicants, 130 to 140 companies are likely to gain approval." Last year, 315 companies applied for KOSDAQ registration, while only 186 were granted listings.

TRADE & MARKETS

Hyundai Construction targets 900 billion won in operating profit

Hyundai Engineering & Construction Co. said Jan. 26th that this year it would aim to achieve an operating profit of 900 billion won on sales revenues of 7.38 trillion. It is also targeting 9.8 trillion won in new orders this year.

The company said its operating profit for last year was estimated at 499 billion won on sales of 6.72 trillion won, up from 337 billion won and 5.7 trillion won in 1999. Hyundai pledged continued restructuring efforts through staff cuts and an organizational overhaul to raise efficiency and profitability.

The ailing construction company raised 1.3 trillion won through asset sales last year and plans to raise an additional 750 billion won this year. Despite its failure to completely accomplish its restructuring pledges, it averted bankruptcy due to creditor debt rollovers and the government's revolving bond plan.

Korean car sales in Western Europe up 5.5 pct. in 2000

Korea's auto makers sold a total of 504,979 vehicles in 18 West European countries last year, marking a 5.5 percent increase from the previous year, the Korea Trade-Investment Promotion Agency (KOTRA) reported Jan. 26th. Citing figures released by the Brussels-based European Car Makers Association (ACEA), KOTRA said that local car manufacturers sold 504,979 units to the 15 European Union members plus three other countries, up 5.5 percent from 26,245 units posted for 1999.

As a result, the market share for Korean cars in Western Europe increased to 3.43 percent last year from 3.18 percent in 1999. By maker, Hyundai Motor sold 227,000 vehicles, taking a 1.5-percent market share, while Daewoo Motor's sales rose to 201,000 units for a 1.4-percent market share. Korea's gains are more impressive considering aggregate car sales in Western Europe actually declined by 2.2 percent from the  previous year to 14.74 million units.

According to KOTRA, German giant Volkswagen topped the list with 2.75 vehicles sold in 18 western European countries last year, followed by the PSA Peugeot Citroen Group (1.9 million units), GM Group (1.59 million units), Ford Group (1.58 million units) and Renault (1.55 million units).

Japanese companies, as a whole, sold a total of 1.67 million units, down 3 percent from the previous year, with Toyota and Nissan selling 541,000 and 394,000 units, respectively

Updated January 3rd 2001