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  • Economy

    US-Iran deal offers relief to Korean economy, but lower energy prices may take time

    A ceasefire agreement between the United States and Iran and plans to reopen the Strait of Hormuz have eased one of the biggest external risks facing Korea's economy, but oil prices could take time to stabilize and return to pre-war levels, experts said Monday. U.S. President Donald Trump announced Sunday (local time) that Washington and Tehran have reached a peace deal aimed at ending their monthslong conflict, saying that the strategically vital Strait of Hormuz will reopen once the agreement is formally signed later this week. International oil prices retreated after the announcement. Brent crude fell to around $87 per barrel and West Texas Intermediate (WTI) dropped to around $84 per barrel, down from levels that had at one point approached $100 during the conflict. The latest development is particularly significant for Korea, which imports virtually all of its crude oil, with roughly 70 percent originating from the Middle East and much of it transported through the Strait of Hormuz. Earlier this year, the country scrambled to secure alternative crude supplies and shipping routes. Ex

    2 MIN READBy Yonhap
    US-Iran deal offers relief to Korean economy, but lower energy prices may take time
  • Policy

    Labor groups demand minimum wage of $7.90 in 16.3% increase

    1 MIN READBy Yonhap
    Labor groups demand minimum wage of $7.90 in 16.3% increase
  • Economy

    Korea's currency strengthens on US-Iran peace deal

    1 MIN READBy Yonhap
    Korea's currency strengthens on US-Iran peace deal
  • Economy

    KRX issues buy-side sidecar for KOSPI on sharp rise

    1 MIN READBy Yonhap
    KRX issues buy-side sidecar for KOSPI on sharp rise
  • Economy

    Seoul stocks sharply higher late Monday morning on US-Iran deal

    1 MIN READBy Yonhap
    Seoul stocks sharply higher late Monday morning on US-Iran deal
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Economy

Korea logs smaller-than-expected fiscal deficit in 2021 on larger tax revenue

gettyimagesbank Korea's fiscal deficit is estimated to be sharply smaller than its previous estimate last year on the back of larger-than-expected tax revenue, the finance ministry said Thursday.The consolidated fiscal balance, a key gauge of fiscal soundness, logged a deficit of 30 trillion won ($25 billion) in 2021, much smaller than the government's earlier projection of 90.3 trillion won, according to preliminary data from the Ministry of Economy and Finance.The improved fiscal health was attributable mainly to an increase in tax revenue and a rise in profits from the operation of the National Pension Fund, the ministry said.Korea's tax revenue rose 58.5 trillion won year-on-year in 2021 amid the economic recovery and rises in housing prices. The country's excess tax revenue came to 61.4 trillion won last year.The government collected 344.1 trillion won in taxes in 2021, up from 285.5 trillion won the previous year, according to the ministry. In December last ye

Feb 17, 2022
Korea logs smaller-than-expected fiscal deficit in 2021 on larger tax revenue
Economy

Game stocks suffer decreased operating profits

gettyimagesbankBy Anna J. ParkWhile most listed local companies have been logging shaky stock prices lately, game stocks are being hit particularly hard by uncertainties. The stock prices of most major game companies listed either on the main benchmark KOSPI or tech-heavy Kosdaq peaked last November, and have been plummeting ever since. Krafton, the country's largest game company by market cap, saw its stock price hit 277,500 won on Wednesday's closing, a drop of more than 50 percent from its peak intra-day trading price of 580,000 won ($484) logged just three months ago in November. The situation is also similarly dire for NCSOFT, Korea's second-largest game developer. The company's stock price has been on a general losing trend for the last year, despite some fluctuations. After logging the highest intra-day trading price of 1,048,000 won last February, the company's stock price fell to 492,500 won on Wednesday's closing, a 4 percent fall from the previous day.Their falls are particularly painful, given that both the KOSPI and Kosdaq finished bullish on Wednesday, rising by 1.99 pe

Feb 16, 2022By Anna J. Park
Game stocks suffer decreased operating profits
Economy

Korea's job market has yet to bottom out

Country reports largest job growth in 22 years in January due to low base effectBy Yi Whan-wooThe country's largest job growth reported in nearly 22 years in January will not last long, as it is mainly attributed to a low base effect, which will fade away by March or the end of the first half at the latest, analysts said Wednesday.They also said the digital technology and other sectors associated with contactless services will have a limited impact on continued job growth momentum. The skeptical outlook comes after Statistics Korea announced Wednesday that the number of employed people in the country increased by 1.135 million year-on-year to 26.95 million in January.The increase rate was the highest since March 2000, when the country was recovering from the Asian financial crisis and saw the number of employed people rise by 1.21 million.Statistics Korea said the record increase in employment is attributable to a base effect, plus change in industrial structure in the pandemic era, noticeably digital transformation and non face-to-face businesses.On Facebook, Deputy Prime Minister a

Feb 16, 2022By Yi Whan-woo
Economy

Securities firms face earnings fall amid fears of capital outflow

Traders work in a dealing room of Hana Bank's headquarters in Seoul, Wednesday morning. YonhapBy Lee Min-hyung Korea's major securities companies face an earnings decline in the first quarter of 2022 amid growing fears of capital outflow ahead of the U.S. Fed's looming rate hikes, data showed Wednesday.According to data from market tracker FnGuide, the nation's top five securities firms are forecast to report an earnings drop of more than 20 percent between this January and March, compared to a year earlier.The negative outlook reflected by escalating financial uncertainties in Korea has been sparked by the Fed's possible rate hikes which are scheduled for March. External geopolitical risks surrounding Ukraine also cloud the outlook for a near-term rebound of the local stock market.These external risks are escalating fears that foreign and institutional investors will engage in a mass selling spree of local stocks. The benchmark KOSPI has, in recent weeks, plunged to around the 2,700-mark. Late last year, the index hovered around the 3,000 point mark, but has since been on a sharp de

Feb 16, 2022By Lee Min-hyung
Securities firms face earnings fall amid fears of capital outflow
  • Korean stock markets feared to lose vibrancy due to Fed's rate hikes
Economy

Korean stock markets feared to lose vibrancy due to Fed's rate hikes

A dealer scratches his head in front of an electronic board set up at a dealing room of Hana Bank's headquarters in Seoul, Monday. YonhapUkraine risks will not be long-lasting: expertsBy Lee Min-hyungKorean stock markets are feared to lose vibrancy throughout 2022, as the U.S. Federal Reserve's planned quantitative tightening will weaken investor sentiment and block the influx of capital into the country, analysts said.Market experts advised investors to be wary of a possibly longer-than-expected adjustment of the benchmark Korea Composite Stock Price Index (KOSPI) and secondary Kosdaq after the Fed initiates its rate hike in March. Spooked by fears of an imminent U.S. monetary tightening, investors are unlikely to remain as aggressive as they used to be about investing in stocks from emerging markets, including Korea, at least until the end of this year, according to analysts.Local stocks enjoyed a robust rally for the past two years since the outbreak of the COVID-19 pandemic in early 2020, but the market recently lost momentum for additional growth and entered an adjustment period

Feb 16, 2022By Lee Min-hyung
Korean stock markets feared to lose vibrancy due to Fed's rate hikes
  • Securities firms face earnings fall amid fears of capital outflow
Economy

Dispute on short-selling resumption rekindled amid gov't bid for MSCI inclusion

gettyimagesbankBy Lee Min-hyungThe government is in an escalating dispute with retail investors over the complete resumption of short-selling here. The controversy centers on whether financial authorities will allow short-selling in the local stock market by May, as the move will help Korea get its name on the Morgan Stanley Capital International (MSCI) watch list in June.Placement on the watch list is the first step for the stock market to win the much-anticipated “developed market” status from MSCI, possibly as early as 2024.But retail investors have for years cried foul over the trading practice, strongly denouncing the government's move to resume the short-selling of Korean shares. Individual investors argue that the short-selling resumption will only benefit institutional and foreign investors due to their dominant market influence here.For now, the ban on short-selling has only been partially lifted on stocks in the KOSPI 200 and Kosdaq 150.Short-selling was temporarily banned in March 2020 after the local stock market collapsed amid then-escalating fears of the COV

Feb 15, 2022By Lee Min-hyung
Dispute on short-selling resumption rekindled amid gov't bid for MSCI inclusion
Economy

World's largest trade bloc expected to become boon for Korea amid pandemic, trade feud

RCEP results in de facto FTA with Japan, opens doors with ASEAN widerBy Yi Whan-wooIt took almost 10 years for the world's largest trade pact ― the Regional Comprehensive Economic Partnership (RCEP) ― to take effect in Korea, Feb. 1, after the country under the then-incumbent Lee Myung-bak administration began to consider joining a multinational trade bloc led by either the United States or China, or both.The global trading environment has changed so much since then, with the COVID-19 crisis, deepening U.S.-China conflict, disrupted supply chains, China's steep economic slowdown, lingering Trumpism and other risks that were unforeseeable in the past decade. All of these factors leave people questioning whether Korea can benefit from the RCEP as intended originally.The question additionally sums up risks associated with China and Japan, both participating countries of the 15-member RCEP that each have weaponized trade against Korea over bilateral diplomatic conflicts in recent years.Plus, India decided to stay out of the RCEP after taking into account its trade deficit with the foundi

Feb 15, 2022By Yi Whan-woo
World's largest trade bloc expected to become boon for Korea amid pandemic, trade feud
Economy

Securities firms eye carbon emissions market

gettyimagesbankBy Anna J. ParkAs global awareness of climate and net-zero targets rises, the market for carbon emissions trading is also growing quickly in Korea. In order to facilitate the local emissions trading market, the Korea Exchange (KRX) allowed 20 local brokerages late last year to participate in carbon emissions trading. The local emissions trading market opened in early 2015, where some 650 registered business entities trade carbon credits. Against that backdrop, Goldman Sachs' Seoul office is joining the growing market from this year, aiming to broker emissions trading between Korean businesses and foreign companies. It will be the first time for such a cross-border emissions brokerage service to be provided in the country. The Seoul office of the U.S.-headquartered global investment bank officially registered for cross-border carbon emissions trading with the Financial Supervisory Service (FSS) ― the country's financial authority ― at the end of last year, declaring that the office will kick off the brokerage service starting this year. Goldman Sachs aims to support the

Feb 15, 2022By Anna J. Park
Securities firms eye carbon emissions market
Economy

Watchdog to intensify oversight of foreign currency liquidity, real estate lending

Apartment buildings in Seoul / Yonhap South Korea's financial watchdog vowed Monday to keep closer tabs on financial institutions' management of foreign currency liquidity and real estate lending this year in a move to better respond to potential risks amid growing market uncertainties.The Financial Supervisory Service (FSS) devised the plan for the New Year amid major countries' monetary tightening to rein in inflationary pressure, the prolonged pandemic and concerns over instability in the Chinese property market.According to the plan, the FSS will enhance the monitoring of the non-banking sector's management of foreign currency liquidity and devise an advanced risk evaluation system.The watchdog also plans to expand its oversight of companies' exposure to real estate financing. Currently, only brokerage firms, asset managers and trust companies are subject to the supervision.In a move to tame growing private loans, the FSS vowed to integrate the management of hou

Feb 14, 2022
Watchdog to intensify oversight of foreign currency liquidity, real estate lending
Economy

Stock markets face tumble as Russian-Ukraine tensions rise

Ukrainians attend a rally in central Kyiv, Ukraine, Saturday, during a protest against the potential escalation of tensions between Russia and Ukraine. AP-YonhapSoaring global oil prices expected to decrease local stocks' valuations By Anna J. Park Local stock markets are forecast to feel a direct impact from global asset market turmoil, triggered by the heightening tension between Russia and Ukraine. Steeply soaring energy prices could also ultimately increase the risks of economic recession and inflation, analysts warned.Global asset markets ― such as for equities, raw materials and cryptocurrencies ― are showing jittery signs ahead of the heightened uncertainties surrounding the two neighboring countries, as the U.S.'s top security official warned Friday that Russia's military could begin an invasion of Ukraine any day now.Reflecting the pressure from these grave geopolitical concerns, U.S. stock markets were under sell-off heat in Friday's session; the Nasdaq Composite dropped by 2.78 percent, the S&P 500 shrank by 1.9 percent and the Dow Jones Industrial Average by 1.43 perc

Feb 13, 2022By Anna J. Park
Stock markets face tumble as Russian-Ukraine tensions rise
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