Bamboo Innovator

Korean business community in depths of crisis; Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment, marking the largest number since the May 16 military coup in 1961

Korean business community in depths of crisis

Kim Eun-pyo, Noh Won-myung

Korea’s business community is moaning in the wake of a series of detentions of top business leaders. Business conglomerates are already triply distressed by reduced competitiveness, cash crunch and poor business performance in a protracted global recession. Business groups which have sought speedy growth buttressed by family owners in the global market have hit a snag in their long-term strategy. SK Group and Hanwha Group, the nation’s third and 12th largest conglomerates, respectively, are in this case. Among the owners of major business groups, eight chief executives are currently detained or sentenced to imprisonment. Some say it marks the largest number since the May 16 military coup in 1961. The market is already weighed by concerns over a liquidity crisis caused by a series of downfalls of Woongjin, STX, Pantech and more recently Tongyang, which had brought a new wave of change in the local business community. Rumors are already swirling that some of the nation’s top 30 business groups may be hit by a severe liquidity crunch although little signs are surfacing. “Authorities should pay attention that there is a serious optical illusion in Korea’s industry situation due to upbeat sales of Samsung Group and Hyundai Motor Group. If they rest on some positive economic figures of foreign exchange reserves and trade surplus, the Korean economy could face a big crisis as early as next year,” warned Jangwoo Lee, Professor of Kyungpook National University.

Demise of ‘too big to fail’; Tongyang, once one of the top 10 conglomerates, has failed to adjust itself to the changing business environment

2013-10-01 17:11

Demise of ‘too big to fail’

Tongyang Group appears headed for a breakup as its main affiliates applied for court receivership after being squeezed by liquidity woes for long. Following the court receivership applications by three affiliates, including Tongyang Inc., Monday, Tongyang Cement, the conglomerate’s flagship company, and Tongyang Networks filed for bankruptcy protection Tuesday. Read more of this post

Tongyang Group Chairman Hyun Jae-hyun is likely to lose his control of the company as five affiliates have filed for court protection to avoid bankruptcy

2013-10-01 18:15

Tongyang chief may lose control

By Choi Kyong-ae

Tongyang Group Chairman Hyun Jae-hyun is likely to lose his control of the company as five affiliates have filed for court protection to avoid bankruptcy.
As he failed to guide Tongyang through the continued economic slowdown, economists urged Hyun to step down as chairman taking responsibility for the current dire situation at the conglomerate. Read more of this post

The weak construction industry in China is affecting two heavy machinery companies here in Korea. Doosan Infracore and Hyundai Heavy Industries are thus making changes to accommodate their declining market share; Doosan held 18.9% of the market in China in 2006 but last year, the figure dropped to 8.5%

2013-09-30 16:17

Slump in China hits Doosan, Hyundai

By Yi Whan-woo
The weak construction industry in China is affecting two heavy machinery companies here in Korea. Doosan Infracore and Hyundai Heavy Industries are thus making changes to accommodate their declining market share. Doosan Infracore, Korea’s largest construction equipment manufacturer, held 18.9 percent of the market in China in 2006 but last year, the figure dropped to 8.5 percent, according to latest data from the China Construction Machinery Association (CCMA). Read more of this post

Sportswear brands ride fitness boom in Korea

2013-10-01 18:12

Sportswear brands ride fitness boom

By Rachel Lee
As an increasing number of consumers here take an interest in fitness and a healthier lifestyle, sports brands are entering the fitness industry as a way of attracting them.
According to industry sources, some established sportswear makers have already begun to work with local gym and yoga professionals and launched their own training apparel collection.  Read more of this post

45% of South Koreans aged 65 and over live in poverty

45% of South Koreans aged 65 and over live in poverty

By Lily Kuo @lilkuo 11 hours ago

The world is aging fast and many countries, even wealthier ones, aren’t prepared for it, according to a new index accessing the economic well-being of elderly people around the world. In most cases wealthy countries outranked poorer ones in terms of supporting their elderly populations. Sweden and Norway were at the top of the index while Pakistan, Tanzania and Afghanistan ranked last. The index, compiled by the United Nations and the elderly rights group HelpAge International, looked at areas including income security, life expectancy, and employment, education and social support of elderly people. By 2050, people over the age of 60 will outnumber those under the age of 15, the report said. Read more of this post

Hong Kong companies: control freaks

Hong Kong companies: control freaks

Make a note of these names: Wharf Holdings, Henderson Land and Hang Lung. In 1987, these Hong Kong giants were among those reported by the Financial Times to be interested in seeking, along with Li Ka-shing’s Cheung Kong and Hutchison Whampoa, dual-class share structures. The storm stirred by these blunt bids for control stopped any of them doing so. It also ushered in the ban that far more recently, helped produce Alibaba’s contorted proposal, dismissed by Hong Kong, to instead control its board via a partnership. Now the Alibaba ruckus is pushing Hong Kong to debate how it can attract such exciting companies. But one look at how its biggest companies are already controlled suggests Hong Kong needs to think also about how it could make its existing market more enticing. Read more of this post

Alibaba’s demands have echoes in Hong Kong’s history; when Li Ka-Shing announced B share plans for his two corporate redoubts, Cheung Kong and Hutchison, other tycoons followed, sending Hang Seng down 5% in the next few days

October 1, 2013 3:48 pm

Alibaba’s demands have echoes in Hong Kong’s history

By Paul Davies

Hong Kong forced to think again about ownership and control

Brian Powers was a hotshot investment banker in his mid-30s when he arrived in 1986 as chief strategist at Jardine Matheson, Hong Kong’s original conglomerate trading house. It took less than a year for the US-born financier – a former American football player – to provoke a mini-crisis in the city’s stunted, under-developed stock market by trying to divorce ownership from corporate control. Read more of this post

No end to China’s impractical skyscraper craze

No end to China’s impractical skyscraper craze

Staff Reporter

2013-10-02

Andrew Lawrence, a securities analyst at Deutsche Bank, put forward the Skyscraper Index in 1999, which expounded the theory that investment in skyscrapers peaks when a business cycle is close to a downturn —in other words, when buildings go up, the market goes down. Based 2010 figures, China has seven out of the world’s 10 tallest buildings. The figure did not include those under construction, however, with the total number of buildings over 300 meters tall in China coming to 77. Among the 77, there are 14 in northern China’s Tianjin alone, followed by Chongqing in southwest China with seven. Read more of this post

Factory ‘boys’: the changing face of China’s production lines

October 1, 2013 8:44 am

Factory ‘boys’: the changing face of China’s production lines

By Demetri Sevastopulo in Shenzhen

In a Shenzhen factory, workers sit along a production line, packing expensive headphones that in just days will land in the hands of consumers across the world. 

Young Chinese women have long churned out products for western shoppers. But the scene on the line points to a big change – roughly half the workers are men. Liam Casey, chief executive of PCH International, which owns the plant, says factories in south China are turning to men as they cannot hire enough women. “When I would go to the factories before, back in the 1990s and right through the early 2000s, it was always women on the production lines,” says Mr Casey. “Now it is a lot of men . . . It is a complete change.” Read more of this post

An increasing number of young people in China are choosing to have plastic surgery to improve theirappearances and start new lives

Students go under the knife in search for betterjobs

Updated: 2013-10-02 00:48

By He Na ( China Daily) Read more of this post

Multinational companies are buying more financial protection against swings in emerging market currencies, after being hit by a summer of volatility in countries that account for an increasingly large share of their business.

October 1, 2013 6:54 pm

Volatility pushes companies to buy more forex protection

By Delphine Strauss

Multinational companies are buying more financial protection against swings in emerging market currencies, after being hit by a summer of volatility in countries that account for an increasingly large share of their business. Citigroup, the market leader in foreign exchange trading by non-financial institutions, said its business with companies hedging exchange rate risk in emerging markets had risen 12-13 per cent since the sell-off in these currencies gathered pace in June. Read more of this post

European groups buffeted by emerging market currency volatility

October 1, 2013 1:54 pm

European groups buffeted by emerging market currency volatility

By Chris Bryant in Frankfurt and Rachel Sanderson in Milan

Unilever’s warning that “significant currency weakening” in emerging markets would cause quarterly sales growth to slow reminded investors this week that currency effects will weigh on European third-quarter corporate results. Over the past two years fast-growing sales in emerging markets have provided a much-needed cushion for large European multinationals, offsetting stagnation or decline in their core home markets. Read more of this post

New accounting rules make axing reactors cheaper?

New accounting rules make axing reactors cheaper

KYODO

OCT 1, 2013

The government revised accounting rules Tuesday for utilities to prevent their business from deteriorating abruptly if they decommission nuclear reactors earlier than planned. Power firms are required to set aside reserves for scrapping each of their reactors while they are still in service. The new rules allow them to continue to recoup the funds through electricity rates for up to 10 years beyond the end of a reactor’s operational life. Read more of this post