Today’s Korean News summary 06.05.15

Today’s Korean News summary 06.05.15

Summarized and translated from Joseon Daily Post.

Daily MERS situation in Korea!

Politicians overact and demand that the president take charge of the situation to do … what?

Even though the government is operating a response task force, voices are saying only the president can curve the public fear that is vastly disproportionate to the actual medical threat. What actually do they want the president to do? The Ebola example in the U.S. is used to basically say that the president should go into full fledge emergency PR mode.

Politicians exploit the situation with lies

The mayor of Seoul stated that a confirmed MERS infectee had went around in public and met over 1500 people in a day at a public event. However, he cannot provide any facts to support this claim as he says that he overheard it or imagined it or something like it in a meeting.

The spread of MERS after 15 days

The first confirmed infectee was located in Pyeongtaek, Korea. It seems that this first infectee spread MERS to the people in the hospital he was being treated in. One of these people then traveled to Daejeon where this person was treated in two hospitals in separate occasions. The same thing happened in these hospitals also.

At the present, MERS has been identified in the cities of Seoul, Daejeon, Pyeongtaek, and in the South Chungcheong Province.  There are currently about 50 confirmed infectees and about 1600 are “self” quarantined for observation.

Even though no teens were infected, mothers’ over act

As a result of angry parents’ complaints, many schools in Korea have been shut down for the unforeseeable future. However, evidence has shown that MERS tends to target populations over 45 years old with a low rate of infection in teen populations. Even in Korea, the youngest infectee is 25 years old. Some specialists say that there is not enough evidence to say that “age” is a factor with the disease at the moment. Other factors may be more important.

Korea is over reacting!
Specialists say that the virus, MERS, originating from camels is not a wide spread threat to the country because of its low rate of infection. The virus mostly infects the lower repertory system making it difficult to get out of the body. In case of Korea, it seems that the virus was release during a medical procedure to remove fluid from that region. This means it was a special case rather than the norm of the virus’ infection capabilities.    

Defense News

North Korea released video of their Submarine-launched ballistic missile (SLBM) firing test which formerly thought to be doctored.

Entertainment News

In a recent survey, evidence shows that Korean movie going audience is changing their behaviors from watching movies as a social experiment to a solitary one. About 44.5% of the responses state that they watch movies alone. They are also selective in movie theaters depending on the genre of movie. In addition, the current movie genre preference seems to prefer action and SF genres over thrillers and romance melodramas.

Economic News

Elliott management Takes a bite into the Samsung C&T and  Cheil Industries’ merger

The shockwaves of the announcement, that the American based hedge fund Elliott management owns 7.12% of Samsung C&T stock, has put a dent into the merger of Samsung C&T and  Cheil Industries. The two companies are core companies in the Samsung group with Cheil Industries being the de facto holding company of the entire group.

The underlining motivation of the merger is to shift enough stock to current vice chairmen  Lee Jae-yong in preparation for a transfer of the group’s controlling ownership in the near future. Thus, this sudden unforeseen external incursion has become a wrench in the works.

Elliott management is known for buying up high risk government bonds and turning a profit via high exposure lawsuits. This has given the hedge fund a notorious reputation. While the fund has said that it is against the merger because it goes against their long term interest regarding their stakes in the Samsung C&T, it is thought that Elliott management is trying to take advantage of this merger’s importance to the controlling parties of the Samsung Group. It is known that vice chairmen  Lee Jae-yong does not have enough shares to make the deal go through without a considerable participation of foreign stockholders like Elliott management.

Korean Stock Market news

In regards to cooperate Mergers in Korea, the saying in the Korean Stock Market is to invest, among the companies involved in the merger, in the company with the higher stock investment of the controlling party i.e. Group chairman and his family. This is because the controlling party of the merger always steers the merger settlement in favor of their own investment and control of the resulting sole company.

The changing currency values is hurting Korean exports

With the devaluating of the Yen and the decreasing value of the Euro, many Korean industries are being put in a disadvantage. In the automotive industry, Hyundai and Kia have dropped to the 10^th and 11^th place in the global market.  Korea’s closest competition, Japan, has doing well out of the situation as their Ship Construction and Steel making industries are able to take advantage of the low Yen value to undercut Korean companies in price competitions.

While the big boys were hurt, the little “mid to small size” companies were hit harder as their already thin profit margin does not make it easy to deal with a situation where their products are now slightly more expensive than Japanese products.

Chinese investing massive amounts of cash in foreign markets in response to Japan’s actions.

The currency devaluing war is heating up. Over the last year, China has been investing, and loaning out massive amount of cash outside of its boarders in order to reduce the visible amount of the country’s foreign trade surplus balance. This is in support of the country’s effort to devalue their currency since their high surplus would garner resistance to the effort to devalue Chinese’s currency in the global market.  However, the Chinese are not the only one is this game. Japan has been doing a similar thing for even longer in order to devalue their currency also.

In contrast, Korea has only been responding with minor reduction in interest rates which has not helped the Korean economy fight this war. The reliance on market forces alone is simply not enough as Korea’s global trading surplus has been increasing with the decline in domestic spending over the last few years. There are voices that Korea also has to reduce their considerable foreign currency reserves in order to devalue its own currency.

Real estate news

The asking price of smaller size apartments in Korea has been increasing faster than larger size ones recently. This seems to be in response to the increase in demand resulting from improvements in space management made on the part of modern apartment designers.   

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