Wednesday, August 24, 2011

Korea stakes claim in post-Ghadafi Libya: Corporate vultures begin to circle

As the regime of Moammar Gadhafi crumbled, the value of South Korean construction firms rose.

When rebel forces swarmed into the dwindling Tripoli strongholds of Moammar Gadhafi Tuesday, investors in distant Seoul pushed the stock value of companies like Daewoo Engineering & Construction and Hyundai Engineering & Construction up nearly 10%, betting that the new rebel regime will mean lucrative reconstruction contracts.

"Libya is to Korean construction companies as China is to German machinery manufacturers," said Ben Simpfendorfer, managing director of Silk Road Associates, an economic and political consultancy.

"China doesn't drive the German economy, but when China manufacturing is up, German machine manufacturers are selling more products to China," Simpfendorfer said. "Much of the Korean construction companies have been involved in Libya and the Middle East in a big way for the past decade." more