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"Korean Contractors Little Exposed to Financial Risk in India and Indonesia"...Shinhan Inv.

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Friday, August 23rd, 2013
SEOUL, KOREA- Shinhan Investment Corp. said on August 22 that the impact of a financial crisis in India and Indonesia on Korea's construction contractors would be minimal, with its investment opinion on the stocks at "neutral."Park Sang-yeon, Shinhan Investment Corp. analyst, said, "India and Indonesia taken together account for only 5 percent of Korean construction companies' total order booking amount per year for five years since 2008. This is an almost negligible figure and even a financial disaster in these countries would have limited impact on Korean contractors doing business there."
 
Currently there are two Korean companies actively engaged in these two nations, including Samsung C&T and Samsung Engineering. Park said, "The project undertaken by Samsung Engineering in India is almost at a completion stage. Although the 390-billion-won Banyu Urip project in Indonesia will be completed by August next year, there is little problem as it is being jointly carried out ExxonMobil."
 
As for Samsung C&T, he said, "Early this year it won a 250-billion-won project to build a section of subway line in Delhi. At present, there is no problem in financing and commissioning body."
 
"Hyundai Engineering & Construction is working on building a 750-billion-won geothermal power plant in Indonesia. But the project was commissioned by a Japanese company, which is safe from a possible financial instability in the country. As for GS E&C and Daewoo E&C, there is little to worry about either," Park added.

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