Foreign investment hits $5.7 bil. by June: Monthly total up nearly 50 percent on capital inflow to Hyundai units

 The Korea Herald 2000.07.06

    Compared to disappointing figures in May, foreign investment in Korea surged in June, highlighted by major investments into Hyundai Group affiliates, the Ministry of Commerce, Industry and Energy said yesterday.

    Totaling $1.18 billion, foreign investments last month showed a welcome turnaround from their 18 percent decline in May.

    In a statement, the ministry said it expects major investments during the second half to allow the government to meet its target of $16 billion this year.

    Last month, Hyundai Investment Trust & Securities Co. received $900 million from six foreign financial institutions, while Hyundai Motor Co. formed a strategic alliance with DaimlerChrysler AG of Germany, the ministry said. Foreigners invested $1.11 billion into the local services industry and $64 million in manufacturing companies last month, the ministry said.

    In the months ahead, foreign investment is expected to increase if creditors manage to sell ailing Daewoo Motor Co. to a foreign buyer.

    During the first six months of this year, foreign investment totaled $5.73 billion - a 28.3 percent rise from the same period last year, the ministry said.

    Foreign investments in domestic manufacturing companies increased 59 percent on year to $2.5 billion during the first six months of this year, while investment in the services industry rose 12 percent to $3.22 billion, the ministry said.

    Japanese companies more than tripled their investments in Korean companies to total $1.01 billion over the first six months of this year, while investments from Malaysian businesses rose 70 percent to $679 million, the ministry said.

    However, investments by U.S. and European companies declined. U.S. companies invested $1.03 billion in Korea, a 6.9 percent decline from a year earlier, while investments by French businesses fell 52 percent to $172 million.

    In May, foreign investment in Korea, which had surged up to 102 percent on year at one time during the first quarter of this year, slowed down drastically, leading to speculation that confidence by overseas investors in the nation's economy were waning.

    The ministry said foreign investment in May totaled $660 million, just $380,000 more than the same period last year.