Korea, France bid for 2019 women’s World Cup

ZURICH (AP) ― Football delegates from France and South Korea have handed over their bid documents to FIFA for the 2019 women’s World Cup. 

France and South Korea are also bidding for the 2018 under-20 women’s World Cup, with FIFA’s executive committee to decide on one winner for both competitions in March. 

FIFA’s Sepp Blatter says, “I’m a very happy president to see these two big football nations competing for these two women’s competitions.” 

Blatter noted how both nations recently hosted the men’s World Cup ― France in 1998 and South Korea in 2002 with Japan. 

Blatter says “it’s really great to see now their interest shifting toward women’s competition. ... I’m really confident that either will be fantastic organizers.” 

Next year’s women’s World Cup will be held in Canada.

State audit agency inspects military's research of weapons systems

The state auditing agency has begun an inspection of the military's research of weapons systems in a bid to ensure its transparency, officials said Sunday.

The inspection by the Board of Audit and Inspection (BAI) covers research and development projects carried out by the Ministry of National Defense, the Defense Acquisition Program Administration and its affiliates, including the Agency for Defense Development, on weapons systems used by the army, navy and air force, according to the officials at the BAI and the defense ministry.

The inspection, which began on Oct. 6, comes amid allegations of corruption in the defense industry.

One major scandal involving the defense industry centers on allegations that officials at the state procurement agency fabricated a document for the sonar system of the 3,500-ton Navy salvage ship Tongyeong and paid far more than what it was worth.

In a budget speech to the National Assembly last week, President Park Geun-hye denounced corrupt dealings in defense acquisition programs as "actions serving the interests of the enemy" and vowed to give "exemplary punishment" to root them out.

"There hasn't been an overall inspection of research and development on weapons systems since 2008, and the Tongyeong issue is related to research and development, so (the inspection) is aimed at examining the country's weapons system in detail from the R&D stage," a BAI official said, speaking on condition of anonymity.

The inspection will focus on determining the appropriate use of research funds, the necessity of the research projects and the quality of the weapons systems developed through the projects.

The BAI plans to wrap up the inspection later this month and decide whether to unveil the results once they are out, officials said. (Yonhap)

Won-yuan direct trading market to open in December

The South Korean government said Friday that it would open a won-yuan direct trading market in December. 

The Finance Ministry said it plans to raise the portion of yuan as a trade settlement currency with China from the current 1.2 percent to 20 percent over the long term. Currently, over 95 percent of the both nations’ trade is done in U.S. dollars. 

To boost won-yuan direct trading, the government will adopt a market maker system considering the nascent stage of the market. Market makers, which will be comprised of 10 commercial banks, will play a role in proposing the purchase price on the market, in a bid to set the price and to supply liquidity to the market. 

An electronic broking service will be developed in December for the safety and convenience of won-yuan trading. 

The Finance Ministry also said it would step up its efforts for the smooth transaction of a clearing bank which opened in October. The clearing bank is serving as the Korean branch of the People’s Bank of China in a bid to clear, purchase and supply liquidity of yuan for local commercial banks, foreign banks, securities and securities depositories. 

For the stable business performance of the bank, the government will monitor the safety of the bank’s system and review the exemption of bank levies on yuan debts. 

Korean financial firms’ investment opportunities in the Chinese market will also be expected to increase down the road. 

The Finance Ministry said it would continue to negotiate with the Chinese government to allow more Korean financial organizations to invest in the market. Next year, apart from asset management companies, local banks, securities and insurance companies are also expected to join the RMB qualified foreign institutional investors program, which allows foreign firms to invest in RMB denominated capital markets. 

By Shin Ji-hye (shinjh@heraldcorp.com)

Cash reserves of top 10 S. Korean conglomerates top 125 tln won

The combined cash reserves of South Korea's top 10 conglomerates has reached over 125 trillion won (US$117 billion), a market observer reported Sunday, representing an apparent improvement in  companies' finances.

According to the report from local market researcher Chaebol.com, the combined cash reserves of the 10 largest businesses here came to 125.41 trillion won as of the end of September, up 15.1 percent from 108.99 trillion won at end-2013.

Cash reserves include cashable assets and money invested in short-term market funds.

The rise in cash reserves may reflect the companies' improving financial conditions, but it may also mean the companies are declining to make new investments.

The report also comes amid a government move to tax corporate reserves in an effort to spur fresh investments. The move, however, faces strong opposition from political parties, including the ruling Saenuri Party, whose chief lawmaker Kim Moo-sung has publicly said the government's job is to encourage investment by creating a favorable business environment.

By company, cash reserves held by Samsung Electronics Co., the largest firm in South Korea, spiked 22.9 percent over the cited period to some 54.5 trillion won, though the company's overall sales dropped 9.4 percent on-year to 153.48 trillion won over the same period, according to the report.

Cash reserves of the country's second-largest conglomerate, Hyundai Motor Co., surged 15.2 percent on-year to 25.06 trillion won with those of LG Display, a flat screen affiliate of LG Electronics Inc., gaining 1.8 percent to 2.36 trillion won.

South Korea's largest shipbuilder Hyundai Heavy Industries Co.

saw its cash reserves shrink from over 6 trillion won at end-2013 to 5.5 trillion won as of the end of June. The company, also the world's largest shipbuilder, had reported an operating loss of 1.1 trillion won in the second quarter.

POSCO, the country's largest steelmaker, also saw its cash reserves shrink from about 7.18 trillion won at the end of last year to 5.53 trillion won as of the end of September. (Yonhap)

Foreigners' Samsung ownership hits 8-year high

Foreign ownership of South Korean tech giant Samsung Electronics Co. has reached an eight-year high as overseas investors snap up its shares despite their overall selling mode on the local stock market, data showed Sunday.

As of Friday, foreign investors held 52.33 percent of the top-cap company on the local bourse, the highest proportion since June 13, 2006, according to data from the Korea Exchange and financial sources.

Last month, offshore investors bought a net 881.2 billion (US$825 million) worth of Samsung shares.

In contrast, foreigners sold a net 2.41 trillion won worth of South Korean stocks on the main bourse alone, according to the data.

Market watchers said foreign investors seem to consider Samsung "undervalued" despite growing worries over its performance.

"Foreign investors appear to put a greater emphasis on the fact that Samsung's shares remain undervalued," said Lee Seung-hyuk, an analyst at Korea Investment & Securities Co.

Samsung reported Thursday net profit reached 4.22 trillion won in the July-September period, down 48.7 percent from 8.24 trillion won the previous year and the lowest in three years, on declining sales of flagship smartphones.

Operating profit tumbled 60 percent on-year to 4.1 trillion won from a record high of 10.1 trillion won in the same quarter of 2013, with sales falling 19.6 percent on-year to 47.4 trillion won. (Yonhap)

New iPhones set to hit Korean shelves

Updated : 2014-10-29 21:32

The worldwide craze over the new iPhones will hit the South Korean market on Friday when the iPhone 6 and its variant the 6 Plus go on sale here.

This time, the so-called iPhone effect will have a more significant impact on the Korean smartphone market than ever, according to industry watchers.

The first round of preorders was filled last Friday by the mobile carriers SK Telecom, KT and LG Uplus in less than 30 minutes.

It is estimated that the total number of preorders will reach at least 80,000 units ― 50,000 via KT and 20,000 via LGUplus with the rest through SK Telecom ― surpassing the 30,000 units of Samsung Electronics’ flagship Galaxy Note 4 preordered here.

A customer tries to decide between an iPhone 6 Plus (left) and iPhone 6 during the sales launch at the Apple Inc. store in New York on Sept. 19. (Bloomberg)

Though the battle has just begun, the latest figures are especially meaningful for Apple since the California-based firm has thrashed Samsung on its home turf.

Apple currently accounts for less than 6 percent of the market share here, while the Korean smartphone manufacturer boasts a 63 percent market share, according to market researcher Counter Point Research.

Some market analysts predicted that Apple could secure a record-high market share in Korea thanks to the 4.7-inch iPhone and the 5.5-inch iPhone 6 Plus.

Pressured by the U.S. tech giant, Samsung recently reduced the prices of some of its smartphones, including the Galaxy S4 LTE-A, while LG cut the prices of its mid-range G3 Beat and G3A.

Samsung, which released the Galaxy Note 4 on Sept. 26 in Korea weeks before the launch of the iPhones, also started selling the flagship smartphone Galaxy Note Edge, featuring a curved display on the right-hand side of the device, from Tuesday.

“There are not many options for Samsung and LG to counter the iPhone 6 and low-budget Chinese smartphones except for cutting the prices of their products,” Kim Young-chan, an analyst from Shinhan Investment wrote in a report.

He predicted that the iPhones will outsell the Galaxy Note 4 by tenfold, with 80 million units shipped worldwide in the October-December period.

Other market watchers also are expressing doubts about the performance of Korean tech giants.

“It seems inevitable for Samsung and LG to be affected by Apple’s new devices, which show off better integration between hardware and software and user experience than those of the local firms,” said an industry official who declined to be named.

When the new Apple devices arrive in Seoul, the front pages of local newspapers and online news sites will be once again be plastered with pictures of customers lining up ― with some even camping out ― in front of Apple shops and other retailers to get their hands on the devices.

By Kim Young-won (wone0102@heraldcorp.com)

Samsung Q3 net hits 3-year low

Samsung Electronics Co., the world‘s top smartphone maker, said Thursday its third-quarter profit fell to the lowest in three years on waning sales of flagship smartphones, as it faces challenges ahead in competing with smaller Chinese startups and long-time rival Apple Inc. 

Net profit reached 4.22 trillion won ($4.01 billion) in the July-September period, down 48.7 percent from 8.24 trillion won the previous year, the company said in a regulatory filing. 

Operating profit plunged 60 percent on-year to 4.1 trillion won, from a record high of 10.1 trillion won in the same quarter of 2013. 

Both the net and operating profit mark the lowest in three years for the Suwon-based company, since it logged 4.02 trillion won and 3.75 trillion won in the fourth and second quarter of 2011, respectively. 

The net profit also represents a fourth consecutive quarterly decline, with the operating profit having slid for two straight quarters.

Sales came to 47.4 trillion won in the third quarter, down 19.6 percent from a year earlier. 

The figures were in line with Samsung’s earnings preview released earlier this month.

The weaker bottom line was attributed to a downturn in its mainstay smartphone sector, Samsung said in its earnings release. 

“The new lineups such as the Galaxy Note series failed to get enough market demand, while the average selling price of older models fell.” 

The operating profit in the IT mobile sector plummeted to 1.75 trillion won in the third quarter from 6.7 trillion won a year ago.

Samsung smartphones have been losing competitiveness, squeezed by Apple Inc.’s high-end iPhone 6 and cheaper products made by Chinese players like Lenovo. 

The fast growth of Xiaomi Inc. has become a threat to the Korean giant as the Beijing-based tech startup has aggressively expanded its market presence to currently the third largest in the world’s most populous country. 

The release of the larger iPhone 6 quickened the hard landing for Samsung‘s earnings.

Robert Yi, head of investor relations at Samsung, admitted that the company may have failed to “react swiftly to the change in the global price war between mobile phone makers.” 

“Uncertainties remain as to whether the mobile sector will recover since competition is getting fiercer with rising marketing costs,” he said via a conference call following the earnings release.

Analysts here agreed with his remark.

“Samsung may have overlooked Chinese players. Not many thought they would grow this fast. (Samsung) was too confident about its brand value,” said Kim Young-chan, an analyst at Shinhan Investment Corp. 

Samsung will have to go with a two-track strategy ― keeping premium lineups to vie with Apple, while making cheaper phones to compete against Chinese rivals ― to stave off a further slowdown, Kim added. 

The tech giant announced this week it plans to launch the Galaxy A series, mid-to-low handsets, in China early November. 

Its consumer electronics division posted operating profit of 50 billion won, compared with 350 billion won the previous year. The company cited the absence of a one-off factor since the World Cup and rising panel prices. 

But sales of premium ultrahigh-definition TVs gained 24 percent from three months earlier on robust demand from China, Samsung added. It didn’t disclose comparable on-year figures. 

Samsung’s display and panel part business remained sluggish due to weak sales in organic light-emitting diode, although shipments of liquid crystal displays increased on the back of higher panel prices. 

The memory chip division suffered the lightest blow, propped up by firm seasonal demand for DRAMs and NAND flash chips, Samsung said. 

It logged 2.33 trillion won in operating profit, down from 3.09 trillion won a year earlier. 

Analysts shared the view that Samsung has most likely bottomed out in the third quarter, carefully predicting better fourth-quarter results as a pickup in demand for displays and memory chips may fuel stable growth. 

“We expect a moderate on-quarter rise in Galaxy sales. Samsung has many (smartphone) lineups that Koreans don’t know about, such as those mid-to-low ones being sold in China and India,” said Kim of Shinhan Investment. 

The world‘s top smartphone maker is estimated to post 5.42 trillion won for its fourth-quarter operating profit, down 34 percent from 8.31 trillion won a year ago, according to data compiled by market tracker FnGuide Inc., based on a survey of 27 brokerage houses here. (Yonhap)

Apple CEO Cook comes out publicly as gay

Apple CEO Tim Cook came out publicly as gay Thursday, saying he is proud of his sexual orientation and considers it "among the greatest gifts God has given me."
 
Cook made the announcement in an essay written for Bloomberg Businessweek. He is considered one of the highest-profile CEOs to come out as gay.

"For years, I've been open with many people about my sexual orientation. Plenty of colleagues at Apple know I'm gay, and it doesn't seem to make a difference in the way they treat me," Cook said in the essay.

Cook said he is lucky to work at Apple, which he said "loves creativity and innovation and knows it can only flourish when you embrace people's differences."

He added, "While I have never denied my sexuality, I haven't publicly acknowledged it either, until now. So let me be clear: I'm proud to be gay, and I consider being gay among the greatest gifts God has given me."

Cook said he doesn't consider himself an activist, but hopes his coming-out decision helps other people.

"So if hearing that the CEO of Apple is gay can help someone struggling to come to terms with who he or she is, or bring comfort to anyone who feels alone, or inspire people to insist on their equality, then it's worth the trade-off with my own privacy," he said. (Yonhap)