S. Korea, U.S. to Begin Annual Joint Military Drill: Week Ahead

South Korea will begin a regular military exercise with the U.S. tomorrow, drills that annually draw threats of retaliation from North Korea.

The two-week Ulchi Freedom Guardian maneuvers come following an exchange of artillery fire last week near the disputed sea border between North and South.

South Korea’s military said Aug. 10 it fired three artillery rounds after hearing explosions coming the North. The north fired a second round into waters near Yeonpyeong Island, which was the target of a deadly shelling in November, Yonhap News reported.

The start of the yearly exercise will follow a speech by South Korean President Lee Myung Bak on Aug. 15 to celebrate Independence Day. In last year’s speech, Lee called for a special tax to cover the costs of eventual Korean unification, which North Korea called “sheer nonsense” and a “petty trick” to conceal the true aim of bringing about regime change in the communist country.

Woori Finance

South Korea will release data showing how much liquefied natural gas it imported in July amid rising demand as the cost of crude oil rises. The country buys LNG under multi-year contracts from suppliers including Qatar, Oman, Russia, Indonesia, Malaysia, Brunei and Yemen.

State-run Korea Deposit Insurance Corp. will close preliminary bidding for Woori Finance Holdings Co. on Aug. 17. A group of private-equity funds including Vogo Investment, MBK Partners Ltd. and TStone Corp. indicated interest in Korea Deposit’s 3 trillion won ($2.8 billion) stake in Woori, a person familiar with the matter said in June.

Goldman Sachs Group Inc. may invest 600 billion won in a consortium led by MBK Partners, the Seoul Economic Daily reported on Aug. 12.

Second-quarter earnings announcements will continue, with Korea Electric Power Corp. (015760) and Lotte Shopping Co. to report. South Korea’s benchmark Kospi index fell 7.7 percent last week.

The following is a list of major events in South Korea this week:

Event                                                   Date

President Lee’s Independence Day speech                 Aug. 15
July LNG import data                                    Aug. 15
Ulchi Freedom Guardian exercise to begin                Aug. 16
Korea Electric to report second-quarter earnings        Aug. 16
Deadline for preliminary bids for Woori stake           Aug. 17
Lotte Shopping to report second-quarter earnings        Aug. 18

To contact the reporters on this story: Jun Yang in Seoul at jyang180@bloomberg.net;

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net