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World Business Quick Take

■ SOUTH KOREA
GDP grows 4.9 percent
South Korea's economy grew sharply in the second quarter, expanding at its fastest rate in a year, fueled by strong output of semiconductors, ships and automobiles, the Bank of Korea said yesterday. GDP expanded 4.9 percent in the three months ended June 30 from the same period last year, the central bank said in a statement. That was up from the 4 percent rate in the first quarter. Separately, Moody's Investors Service raised South Korea's long-term foreign currency and local currency ratings to A2 from A3, citing the country's sound fiscal policies, solid economy and easing international tensions surrounding North Korea.

■ THAILAND
Bank to cool down baht
The Thai Cabinet approved measures on Tuesday to try to curb the strength of the baht, which has hit a 10-year high against the US dollar and started to hurt the country's export sector. The measures, drafted by the Bank of Thailand, were a response to the baht's steady appreciation over the past one 18 months. So far this year, the baht has risen 7 percent in value against the US dollar. The baht's closing trading price on Tuesday was 33.64 to the US dollar, up from Monday's close of 33.72.

■ RETAIL
Mitsukoshi eyes alliance
Mitsukoshi, one of Japan's top department stores, has begun talks on joining rival Isetan to form a new industry No. 1 in the face of an increasingly tough market, reports said yesterday. Mitsukoshi, which started out in 1673 selling kimonos and is now Japan's fourth-largest department store operator, may set up a joint holding company with fifth-ranked Isetan, the Nikkei Shimbun and other media reported. They would become the top industry player with combined annual sales of ?1.58 trillion (US$13 billion), surpassing the alliance between operators Daimaru and Matsuzakaya, the reports said, quoting unnamed sources. The two companies, however, said no such plan had been decided.

■ AUTOMOBILES
Hyundai opens Thai factory
Hyundai, South Korea's top automaker, said yesterday that it is setting up a production facility in Thailand, in its first investment in the country since pulling out of the country after the 1997 Asian crisis. Hyundai Motor (Thailand), capitalized at about US$12 million, has been set up for local production and distribution of three models. The automaker aims to begin production of its mid-sized sedan Hyundai Sonata in Thailand in the fourth quarter of this year, with part of the output for export to the rest of Southeast Asia, it said. The company is still determining how many vehicles the facility will produce, a spokesman for Hyuandai's Thai unit said.

■ HOUSING
Meltdown unlikely: Moody's
The downturn in the US housing sector, which has sparked market jitters, is of serious concern but poses no major risk of an overall US financial meltdown, the ratings agency Moody's said yesterday. "The shock-absorption capacity of the `core' of the financial system is very high," Moody's said in a comment. While the crisis in the US "subprime" mortgage lending market "does not raise genuine systemic risk concerns ... there are still serious reasons to worry," the report said. Moody's yesterday maintained that the accounts of the leading US financial institutions were sound.


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