ID :
53956
Sun, 04/05/2009 - 16:58
Auther :
Shortlink :
https://www.oananews.org//node/53956
The shortlink copeid
N. Korea's rocket launch to have limited impact on Seoul markets:
(ATTN: RECASTS headline, first two paras; UPDATES with more quotes and details from
para 5)
SEOUL, April 5 (Yonhap) -- North Korea's long-range rocket launch is likely to
have a limited effect on the South Korean economy and the Seoul financial markets
although it could increase market volatility in the short term, analysts said
Sunday.
The Korean government confirmed that North Korea launched what it claims is a
communications satellite earlier in the day despite repeated international
warnings.
Analysts said the rocket launch is unlikely to have a grave impact on the Seoul
bourse in the long term as the markets, which are accustomed to geopolitical
risks stemming from the North's military threats, have already factored in the
news.
"As chances are slim that South Korea and the United States would take military
actions, the North's rocket launch itself would have a limited impact on the
Seoul bourse," said Sung Jin-kyung, a market analyst at Daishin Securities Co.
The country's benchmark Korea Composite Stock Price Index (KOSPI) gained ground
recently to breach the 1,200-point level, as foreign investors snapped up local
stocks. The Korean currency rose almost 11 percent against the U.S. dollar last
month, shrugging off fears that Japanese investors may pull money out of the
Seoul markets en masse in March.
The previous responses of the stock market to military threats by the North give
some support to the analysts' prediction.
The KOSPI closed a tad lower on July 5 2006 when the communist country test-fired
six medium and long-range missiles that landed off the west coast of Japan.
Although the key stock index tumbled 2.4 percent on the day of North Korea's
nuclear weapon test in 2006, it recouped losses later in about 15 sessions.
"The local financial markets will not fluctuate just because of the rocket
launch," said an official at the finance ministry who asked not to be named.
"Although the market may undergo short-term volatility, it will eventually
stabilize as foreign investors are already accustomed to geopolitical risks
stemming from North Korea's military threats."
Experts also said the rocket firing would not have a negative effect on
consumption and investment as private and business spending has been already
dented by the global economic recession.
The Korean economy shrank 5.1 percent in the fourth quarter from three months
earlier, the worst performance in 11 years, due to tumbling exports and weak
domestic demand. Asia's fourth-largest economy is widely expected to post
negative growth this year, with the government predicting a 2 percent
contraction.
Fitch Ratings said in an e-mailed interview with Yonhap News Agency that the
communist country's rocket launch will likely "jeopardize" the six-party
denuclearization talks but will not have an immediate effect on South Korea's
sovereign ratings. The agency said it would maintain South Korea's sovereign
rating as unchanged at A-plus with a negative outlook.
sooyeon@yna.co.kr
(END)
para 5)
SEOUL, April 5 (Yonhap) -- North Korea's long-range rocket launch is likely to
have a limited effect on the South Korean economy and the Seoul financial markets
although it could increase market volatility in the short term, analysts said
Sunday.
The Korean government confirmed that North Korea launched what it claims is a
communications satellite earlier in the day despite repeated international
warnings.
Analysts said the rocket launch is unlikely to have a grave impact on the Seoul
bourse in the long term as the markets, which are accustomed to geopolitical
risks stemming from the North's military threats, have already factored in the
news.
"As chances are slim that South Korea and the United States would take military
actions, the North's rocket launch itself would have a limited impact on the
Seoul bourse," said Sung Jin-kyung, a market analyst at Daishin Securities Co.
The country's benchmark Korea Composite Stock Price Index (KOSPI) gained ground
recently to breach the 1,200-point level, as foreign investors snapped up local
stocks. The Korean currency rose almost 11 percent against the U.S. dollar last
month, shrugging off fears that Japanese investors may pull money out of the
Seoul markets en masse in March.
The previous responses of the stock market to military threats by the North give
some support to the analysts' prediction.
The KOSPI closed a tad lower on July 5 2006 when the communist country test-fired
six medium and long-range missiles that landed off the west coast of Japan.
Although the key stock index tumbled 2.4 percent on the day of North Korea's
nuclear weapon test in 2006, it recouped losses later in about 15 sessions.
"The local financial markets will not fluctuate just because of the rocket
launch," said an official at the finance ministry who asked not to be named.
"Although the market may undergo short-term volatility, it will eventually
stabilize as foreign investors are already accustomed to geopolitical risks
stemming from North Korea's military threats."
Experts also said the rocket firing would not have a negative effect on
consumption and investment as private and business spending has been already
dented by the global economic recession.
The Korean economy shrank 5.1 percent in the fourth quarter from three months
earlier, the worst performance in 11 years, due to tumbling exports and weak
domestic demand. Asia's fourth-largest economy is widely expected to post
negative growth this year, with the government predicting a 2 percent
contraction.
Fitch Ratings said in an e-mailed interview with Yonhap News Agency that the
communist country's rocket launch will likely "jeopardize" the six-party
denuclearization talks but will not have an immediate effect on South Korea's
sovereign ratings. The agency said it would maintain South Korea's sovereign
rating as unchanged at A-plus with a negative outlook.
sooyeon@yna.co.kr
(END)
