Today’s Korean News summary 06.10.15

Today’s Korean News summary 06.10.15
Summarized and translated from Joseon Daily Post.

Daily MERS situation in Korea!
Preventing further infections is the key
As the MERS outbreak dies down, experts say that the prevention of further infections is important. They say that if one suspects one is infected, the person should not directed visit a hospital. This may end up contaminating the hospital. Rather, people are encouraged to contact the hot line first to get instructions leading them to specific locations.

Starting today, it has been decided that all pneumonia patients currently admitted to hospitals will be tested for MERS and will be prevent from leaving or moving around. Test will be conducted via DNA screening which would take about 4 to 6 hours.

First pregnant MERS patient
Yesterday, a pregnant patient was confirmed to be infected by the MERS virus. She came in contact with a MERS infectee when she visited the Emergency room last month.  Experts say that, while her conditions could cause unforeseen complications with treating the virus, there is no evidence that pregnant infectees are more susceptible to the virus than normal infectees.

Discourse related to reopening the schools
At the present, 2208 schools on various academic levels are closed in Korea. In this case, closed means that all the staff still come in and those students who want to come in could do so. As the MERS outbreak dies down, the schools and government are pondering whether to keep the schools closed. This is because, for all practical purposes, the experts say that there is no need for the schools to be closed in the first place.

However, some parents, out of fear, are against the reopening of schools. They are concerned about their child catching the virus at school and display distrust regarding the decisions of the government.  At the present, the government is trying to make a guideline regarding this issue for wide spread dissemination.

International News
Former Japanese prime minister and former Chief Cabinet Secretary talk
A Former Japanese prime minister and former Chief Cabinet Secretary showed up at a joint press conference to talk about the relations Japan has with its neighbors. They talk about the policies they had during their time in office and provide thoughts on the present situation.

This includes their thoughts on how to classify the situation where Japanese invaded many other countries in the past. They say that the term “invaded” is appropriate. They also say the current prime minister should accept the “facts” about the past and go on from there.

Japan returns the Joseon’s last princesses royal garments.
In 1925, the last princess, whose dynasty had been officially dismantled at the time, was sent to Japan alone by the Japanese government. Her time there was not pleasant. She was arranged to marry a Japanese noble and soon after suffered from mental problems which led to confinement in a mental institution and eventual divorce in 1955 after the war.

Up til the present, none of the princess’ royal garments survived in Korea. The garments being donated to Korea were the property of a museum in Japan. They are an important acquisition because they provide detailed information regarding royal customs.

Real estate News
MERS is not match for getting a new apartment
This June, the rights to put a deposit on about 2500 “soon to be constructed” apartment units are scheduled to be released to the public. These units are located in regions currently up and coming including Wirye New Town, and Goyang city.

So, about 70 thousands people applied to get a unit of Daewoo’s new apartments making the competition to get one of its 430 units be 161.3 to 1. This is the highest figure for all of the regions near the capital ever.  Unlike years past where people had to apply in person, online application made the MERS thing irrelevant in this situation.

As some back story, through law, most new apartments in Korea have to give people equal chance to get their hands on the new apartments. This is not determined by the market. Thus, companies give out the right to buy an apartment at a fixed price via lottery to people who are willing to pay a deposit. In a lot of cases, people end up flipping the units for a considerable profit or selling the rights to own outright.

Economic News
Hiring new people to fight MERS?
The mid to small corporations association has started a campaign for companies to hire an additional “excess” younger person to fight the negative economic effect of MERS.  By doing so, it is trying to create 30 thousand new young people jobs than usual. This is being done in conjunction with various domestic consumer market revitalization campaigns.

Sudden surge of household loans
Last April alone, Korean households barrowed 10 trillion won or about 10 billion dollars which is the first for Korea. This was spearheaded by loans with homes as collateral. These type of loans have been increasing within the 10% range every month over the last 5 months.

It is thought that the recent decrease in interest rates and the government’s intent to artificially boost the real estate market have caused households to go out for more loans than usual. With the addition of these new debts, the current common Korean household debt is estimated to be 1.099 Quadrillion won or 1.099 trillion dollar.

With the recent movement on the part of the U.S. to raise its interest rates, it is thought that this debt may cause future problems with Korea raising its own interest rates in order to prevent the departure of foreign investment capital. However, others say that, since a lot of the new debt was created to take advantage of the expected real estate revitalization, the risk of wide scale defaults is low.

The Samsung C&T merger deal enters the legal fight phase
As the vote for the Samsung C&T and Cheil Industries merger deal looms close, Elliott management has asked the courts to stop the vote from going through. Its claim is that the deal goes against the shareholders of Samsung C&T in which it has about 7% share of.

It is clear that the plea to the courts is just the first salvo in this game as it is likely that the courts will reject its plea. The thought in the market is that, rather than the classic “pump and dump” strategy, Elliott management is going for the long game by exploiting the weak ownership structure of the Samsung group. It may be laying the ground work for a future suit regarding eventual merger of these two companies. 

Elliott management’s main area of contention is that the merger is based on stock values of the two companies rather than their asset values. The view is that the stock value of Samsung C&T has been maintained low deliberately by the Samsung Group.

The next movie may be to directly attack the owners of the Samsung Group in public turning the war into a war of public opinion. This is expected to put pressure on the Samsung Group as their weakness has been made public before.

In response, Samsung Group is trying to convince the Institutional Shareholder Services (ISS) to give the deal a positive recommendation. According to Wikipedia, ISS is a proxy advisory firm who advices multiple companies regarding shareholder votes. ISS is known to have significant pull with foreign institutional investors. 

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