Trip to Seoul
We were in Seoul in March to meet with several CEO's and CFO's
of some of the major quoted South Korean companies. South Korea has
been and continues to be a rich source of world class
Hard to believe, but South Korea is now the world's seventh
largest exporter and a global force in industries from automobiles
(Hyundai, KIA) and electronics (Samsung) and ran a current account
surplus of US$26bn in 2011, or 2.5% of GDP.
We met with bosses of largest internet portal business NHN,
national telecoms operator SK Telecom, construction machinery giant
Doosan Infracore (owner of Bobcat), as well as major financial
groups KB Financial and Samsung Life and Korea Development Bank,
national refiner S-OIL, as well as meeting up with managers from
the National Pensions Service.
Emblematic of how far the country has come in such short time is
the forcing into bankruptcy of Japanese semiconductor supplier
Elpida such has been the strength of the Koreans in the Dram market
as well as Korea National Oil's bid for El Paso's upstream assets
in the US. It's not all a bed of roses however.
The on-going stand-off between North and South remains a feature
of daily life. The two countries are still technically at war (the
1953 agreement to end hostilities is officially classified as a
ceasefire), while the recent death of Kim Jong Il and his
replacement by son Kim Jong Un has increased fears of instability
on the Korean peninsula.
Indeed while we were there Seoul hosted a regional security
conference hosted by the South Korean Government and attracting
heads of governments from around the world, including US President
Ultimately, South Korea's success has made it the largest
economy in Asia ex Japan after China, impressive indeed for a
population of 49 million people.
The stock market has reflected this, the KOSPI index closing Q1
2012 at 2015, close to an all-time high. A rating of 20 times 2012
earnings however makes us guarded in the short term, even while
positive drivers in the longer term we believe will underpin the