South Korea

Dear Leader’s death may prise open hermit state

19 December 2011

Kim Jong-il managed to keep North Korea cut off from the world. Trade flows barely exist, Chinese energy and French cognac aside. The intellectual seclusion is at least as great. Autarky has brought economic hardship, a heavy burden Kim’s successor will struggle to lift.

China won’t be Asia’s importer of last resort

25 November 2011

Slower manufacturing in the second-largest economy is bad news for other Asian exporters like Japan and Korea. They’re counting on China as U.S. and European demand ebbs. But at least a fifth of China’s imports go to making exports, so China may not prove the hedge they hope.

LG rights issue won’t help it win smartphone wars

3 November 2011

Investors dumped shares in the Korean electronics maker even before it announced a surprise $1 billion cash call. Loss-making LG has fallen behind Samsung and Apple in the race to make trendy smartphones. It’s not clear how throwing good money after bad will help.

Korea may change monetary tack to placate young

2 November 2011

Exports are slowing. That used to be a signal for the central bank to ease interest rates to help the big exporters cope. But they are no longer creating jobs young Koreans want. Political pressure from the young may push the bank to be tighter – even if that slows growth.

New U.S. trade deals are political, economic wins

13 October 2011

After an overlong hiatus, the passage of laws fostering commerce with Korea, Colombia and Panama is a welcome boon for free trade. While bilateral deals are only modest job-creators, they deepen economic links, enhance efficiency and build friendships. Next up? Indonesia.

Trouble knocks for Korea’s indebted households

7 October 2011

Seoul has resumed crisis meetings over Europe’s debt drama. Banks and the government itself look sturdy enough, but households are deep in debt, and the foreign inflows that kept loans cheap are fleeing. Korea still has strong finances, but it may need them if defaults spike.

Currency crossfire to hit emerging economies hard

29 September 2011

Money is flowing out of emerging economies. Countries that had complained about currency appreciation have had to prop up forex rates. Turkey and South Korea are vulnerable to hot money retreat. Poland and Hungary are caught in currency traps.

South Korean equities offer bargains for optimists

30 August 2011

Its stocks dived 21 percent this month as leveraged bets soured. Now they look cheap. Big names such as Samsung Electronics trade below 10 times projected earnings. High debt will keep things volatile, but investors sanguine about global growth may want to revisit Seoul.

Korea’s leveraged bets put it at risk of contagion

12 August 2011

Seoul’s stock market fell further than the U.S. this month - 16 pct. South Korea relies heavily on European credit and a U.S. recession would threaten its exports. But the popularity of loans and derivatives to bet on stocks makes Seoul susceptible to even more dramatic declines.