South Korea expects huge economic boost from Winter Games

Reuters News
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Posted: Jul 06, 2011 10:43 PM
South Korea expects huge economic boost from Winter Games

By Jeremy Laurence

PYEONGCHANG, South Korea (Reuters) - Shares in South Korean casino and resort operators and construction firms spiked on Thursday, buoyed by expectations that Pyeongchang's hosting of the 2018 Winter Olympics could pump tens of billions of dollars into the economy.

At an International Olympic Committee meeting, South Korea won the right to host the contest at the third attempt, capping a decade-long campaign to bring winter sports to this rustic town, and sparking all-night celebrations.

A study by the Hyundai Research Institute has said hosting the 2018 Games will inject 65 trillion won ($61 billion) into Asia's fourth largest economy through investment, spending, and spin-off consumption.

On the Seoul stock exchange, Seunghwa Premium Construction Co surged to its daily limit of 15 percent on expectations the builder might be involving in the construction of a highway to Pyeongchang.

Hyundai Cement, which owns a resort in Gangwon Province, home to Pyeongchang, also surged 15 percent, while shares in casino operator Kangwon Land jumped as much as 9.5 percent.

The winning bid was a coup for Korea Inc. as major conglomerates threw their support behind the bid, which was headed by Cho Yang-ho, chairman of flag carrier Korean Air Lines. Samsung chairman Lee Kun-hee is the country's sole IOC member.

Japan is the only Asian country to host a Winter Olympics -- in Sapporo in 1972 and Nagano in 1998.

Pyeongchang ran under the slogan "New Horizons," arguing Asia's stellar economic growth in recent decades and the continent's massive population offered an untapped market for winter sports.

"I'm very happy," said Kim Jung-soon, as she made preparations for the day ahead after the celebrations ended at a barbecue restaurant near the giant ski jump nestled in the scenic foothills of the Taebaek mountains.

Kim was among the nearly 1,000 local residents and visitors who gathered around the Alpensia resort, one of the planned venues for the 2018 Games, dancing to a K-pop boy band and enjoying Korean folk dance and songs before the decision.

Robed monks and hundreds of soldiers in fatigue were among the throng of patriotic supporters waving the flag and "clapper" balloons popular at South Korean sports events, emblazoned with the bid's logo "New Horizons."

"We're hoping there will be a major economic effect from hosting the Olympics," Kim said.

South Korea hosted the Summer Games in 1988 and the World Cup soccer finals together with Japan in 2002.

($1 = 1065.950 Korean Won)

(Additional reporting by Hyunjoo Jin; Writing by Jack Kim; Editing by Daniel Magnowski)