Higher interest rates likely
The central bank yesterday warned that inflation was likely to be higher than it hoped at 3.25 percent in the final quarter of this year, increasing the likelihood of further interest rate rises. The predicted figure for consumer price index (CPI) inflation is above the bank's target rate of 2 percent to 3 percent. "Given the recent pattern of quarterly outcomes, both CPI inflation and underlying inflation measures are likely to rise above three percent on a year-ended basis over the next two quarters," the bank said in a quarterly monetary statement. Underlying inflation in the third quarter of this year was 3 percent year-on-year, prompting the bank's move to raise interest rates last week. It raised rates by 0.25 percent to 6.75 percent, the highest in 11 years.
Woori moves into China
Woori Bank said it set up a wholly owned subsidiary in China yesterday, the first such move by a South Korean lender, as part of its efforts to tap into the Asian banking market. The bank, South Korea's No. 2 in terms of assets, said it launched Woori Bank China in Beijing to expand into the Chinese retail banking market. South Korean lenders are increasingly trying to make inroads into foreign markets as competition intensifies domestically. "By opening the Chinese unit, we are moving one step further towards establishing an Asia-wide network," said Park Byong-won, chairman of parent company Woori Finance. "By 2010, we aim at opening 53 branches in China and raising the number of branches to 200 around the world."
Airbus wins more orders
DAE Capital, an offshoot of public company Dubai Aerospace Enterprise, announced yesterday it would purchase 70 Airbus A320 and 30 A350 planes for a total of US$13.5 billion. DEA Capital, which leases aircraft, said it had signed a letter of intent to buy the 100 planes. The decision was announced at the 10th Dubai air show.
Hyundai to build in Russia
South Korean carmaker Hyundai Motor yesterday confirmed a plan to build a car factory in Russia with a capacity of 100,000 vehicles a year. "The investment plan, which had been under review, was confirmed by chairman Chung Mong-koo at talks with Russian officials during his trip to Moscow last week," company spokesman Ki Jin-ho said. Details have yet to be fixed in follow-up discussions, Kim said. The JoongAng Ilbo newspaper said the company was considering investing US$400 million to build the factory either in Nizhegorod Province or St. Petersburg. The Korea Times said construction may begin early next year.
Diageo eyes Indian stake
Global beverage group Diageo may buy a minority stake in Indian liquor baron Vijay Mallya's United Spirits for as much as US$600 million, the Economic Times reported yesterday. The two firms have held "tentative talks" on the purchase of a 10 percent to 13 percent stake by Diageo in United Spirits, the paper said in a front-page report that cited unnamed sources. United Spirits, which had a market value of about US$4.5 billion as of last week, may be open to selling a small stake without ceding any management control, said the report, which estimated the value of a deal at US$500 million to US$600 million.