Tips for this week's economic issues

¡°There is hardship but no despair¡± is the title of the autobiography that the ex-honorary chairman of Hyundai, Chung Ju-Yung, wrote. His legend began with the construction of a bridge in Kyoryung in 1953. The construction was specially permitted by the Lee Seung-Man government for the purpose of taking down communist militias in Jiri mountain. The construction was then considered impossible due to a lack of technology and equipment. To make matters worse, Hyundai was almost driven to bankruptcy when the won currency devalued after the monetary reform. Hyundai overcame the crisis with pure physicality. Employees and the management poured in their own money to retire bank debts. Even the ex-honorary chairman and his two brothers, chairman In Young and chairman Soon-Young, had to sell their homes. The chairmen of Hyundai¡¯s affiliate groups, Choi Ki-Ho and Kim Young-Joo, also had to contribute all their assets. Hyundai as we know it today has risen up from this bitter hardship.

Hyundai, which is now facing a liquidity problem, announced a restructuring plan on August 13. There is a great deal of attention and speculation on how the Hyundai crisis, one of the largest ever, will come to an end. Creditor banks have accepted the plan and although it lacks the vigor and the determination shown during the Kyoryung bridge construction crisis, it shows Hyundai¡¯s efforts in its own manner.

It is now up to the market. It will be interesting to see how the financing and international treasury markets will react to the plan when they open on August 14. It will be worthwhile to note the demand and supply of Hyundai shares and bonds this week, not to mention the reaction to Hyundai¡¯s disposable assets. What will be most interesting is the reaction of foreign investors.

The rise of petroleum prices will also be this week¡¯s biggest issue as it could change the foundation of low price and low interest policy.

The move of Jin Nyum¡¯s new economic team is also worth noting. The new policies of the civilian government will be revealed for the second half of this year. Keen attention should also be paid to every move that the ministers make, especially their plans to resume talks with the economic sector. The new cabinet will announce the new pro-market policy and the Fair Trade Commission`s investigation into illegal insider trading will begin August 16.

Bidding competitions for the next generation mobile telecommunication technology, known as IMT-2000, re-importing pork from Europe, revitalizing venture companies, follow-up measures for the Kaesong factory sites and the health of chairman Chung Ju-Yung are the focus of this week.