President Lee Emphasizes 'Productive Finance' Amid Budget Discussions
President Lee Jae-myung stated on August 25 that now is not the time to be overly focused on immediate financial figures regarding next year's budget. He called for a shift towards 'productive finance' that prioritizes investments in artificial intelligence (AI) and advanced industries.
The Democratic Party and the government plan to focus on five key areas in the proposed budget, which is expected to exceed 800 trillion won, the largest in history. These areas include AI, three mega projects, future growth engines, youth support, local-led growth, and addressing K-shaped polarization and public safety.
During a Cabinet meeting at the Blue House, President Lee noted, "As the AI transformation accelerates the growth of advanced industries like semiconductors, our economy is facing conditions unlike any before. We must seize the opportunities created by this industrial transformation to lead a substantial improvement in the lives of our citizens."
He added, "We must ensure that our increased financial capacity is used as seeds for greater future returns. It is essential to invest precious future resources in efficient and productive areas, turning today’s 10,000 won into 100,000 won tomorrow, and eventually into 1 million won."
FST Expands Production Equipment for Samsung's 2nm CNT Pellicles
FST, a semiconductor pellicle company, is set to acquire additional production equipment for carbon nanotube (CNT) pellicles from Finland's Canatu. This move is seen as a preparation for mass production of CNT pellicles for Samsung's 2nm foundry process, indicating that the CNT pellicle business is moving beyond technology development to mass production readiness.
According to investment banking sources on August 25, FST has placed an order for the 'CNT100 SEMI' equipment from Canatu. This order follows a previous order for long-lead time items made earlier this year. With the procurement of long-lead components now secured, the investment in increasing CNT pellicle production capacity is officially underway.
KakaoPay Receives Compensation After 4-Year Negotiation
KakaoPay has confirmed that it has received compensation related to the 2022 fire at the SK AX data center in Pangyo. This compensation comes after nearly four years of negotiations between Kakao and SK AX regarding losses incurred from the suspension of key services such as payments, remittances, and loan brokerage.
On August 25, financial industry sources reported that the KakaoPay board recently approved a compensation agreement with SK AX. SK AX has made a lump-sum payment to Kakao, which has since distributed the funds among affected subsidiaries, including KakaoPay. The total amount of the settlement and the specific allocation to KakaoPay have not been disclosed.
Shinhan Card to Launch Mid-Rate Loans for Low-Credit Borrowers
In a move to support low-credit borrowers, Shinhan Card is preparing to launch a 'mid-rate living stability loan,' becoming the first card company to do so. This initiative follows a decision by financial authorities to exclude the increase in mid-rate loans from total household loan management in the second financial sector, allowing card companies to expand their lending capacity.
According to financial industry sources on August 25, Shinhan Card plans to introduce the mid-rate loan as early as late September or early October. Preparations, including system development for the product, are currently underway.
KB Kookmin Card is also working on a similar product with a goal to launch it within the year. Other card companies, including Samsung, Hyundai, Lotte, and BC Card, are considering similar offerings but have not set specific timelines.
Jeju Police Officer Re-Arrested for Falsifying Missing Person Case
A police officer in Jeju has been re-arrested for allegedly falsifying the conclusion of a missing person report and deleting related documents. The Jeju District Court issued an arrest warrant on August 25 after a hearing for the officer, identified as Officer A, who faces charges of neglect of duty, forgery of public documents, and obstruction of official duties.
Officer A was previously detained and had requested a review of his detention, which the court accepted, leading to his release on August 24. However, he was re-arrested just a day later.
He is accused of misleading the person who reported the missing case of 37-year-old Jang Mi-ran by falsely claiming that he had made contact with her, leading to the case being closed. Investigations revealed that he also deleted documents related to Jang from the missing person profiling system.
SK Hynix Labor Agreement Fails by 25 Votes Over Bonus Dispute
A tentative agreement on wages and collective bargaining between SK Hynix and its labor union was rejected by a narrow margin of 25 votes after two months of negotiations. Despite a proposed 6.3% wage increase and expanded benefits, the plan to distribute 60% of the performance bonus in company stock did not gain sufficient support from union members.
On August 25, industry sources reported that 7,535 members voted against the tentative agreement, accounting for 50.08% of the votes, while 7,510 members voted in favor, or 49.92%. Out of 16,083 total union members, 15,045 participated in the vote, resulting in a turnout of 93.81%.
The rejection appears to stem more from the method of bonus distribution than the wage increase itself. The agreement had proposed a 6.3% wage increase, with 40% of the performance bonus paid in cash and 60% in company stock. Of the stock, 40% could be sold immediately, while 20% would be deferred over two years.
Market Watches U.S. Treasury Rates Ahead of Jackson Hole Speech
Domestic government bond rates remain elevated as the market closely monitors the upcoming keynote speech by Kevin Warsh, the new chair of the U.S. Federal Reserve, at Jackson Hole, along with U.S. inflation indicators. If uncertainties regarding the Fed's interest rate path are alleviated, there are expectations for further stabilization of domestic long-term rates.
On August 25, the yield on three-year government bonds in Seoul closed at 3.836%, down 0.6 basis points from the previous trading day. The yield on 10-year bonds fell by 1.5 basis points to 4.320%, while 30-year bonds decreased by 4.5 basis points to 4.632%.
Although government bond yields have shown a retracement after a recent surge, they remain at relatively high levels. Factors such as the potential for domestic interest rate hikes, rising long-term rates in the U.S. and Japan, and increased global fiscal burdens are exerting upward pressure on long-term yields.
42% of Corporate High-Value Homes Used Privately, Tax Agency Investigates
It has been revealed that 42% of high-value homes owned by corporations are being used as residences or vacation homes by their owners. The National Tax Service is investigating 50 companies suspected of tax evasion through the private use of corporate housing, including the use of fictitious labor costs and false tax invoices.
On August 25, the National Tax Service announced that it has begun tax investigations into these 50 companies suspected of using corporate-owned high-value homes for private purposes. The total estimated tax evasion amount is approximately 1.9 trillion won.
A comprehensive review of 2,639 corporate-owned homes exceeding 85 square meters and valued over 900 million won found that 1,097 homes (42%) were confirmed to be used by the owners or their families. The remaining properties included 1,157 homes held for rental purposes and 385 homes used for business purposes, such as employee dormitories. The National Tax Service is also analyzing the usage of the remaining corporate homes and the reporting records of the owning companies.
* This article has been translated by AI.
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