Hasty optimism over financial market should be shunned: think tank

SEOUL, April 26 (Yonhap) -- Despite current signs of the local financial market
stabilizing, full-blown optimism should be avoided as concerns linger over the
bond and foreign-currency funding markets, a private think-tank said Sunday.

"Recent surges in stock markets and the local currency's gains fueled optimism
over the local financial market, but hasty optimism should be shunned and more
attention needs to be paid to main economic indicators," a report by the LG
Economic Research Institute said.
According to the report, concerns over the stagnant debt market and lackluster
foreign investment remain high, although the markets recently showed some signs
of improvement mainly powered by lavish government pump-priming.
"It's hard to say the credit squeeze on bonds with lower ratings has dissolved,"
an economist at the research institute said, adding, "The foreign-currency
funding market is still far from normal, with foreign investment in the local
debt market remaining weak."
The rate of local banks' non-performing loans, or loans that are three months
overdue, is also likely to swell if the economic downturn continues, the
economist said.
The loan delinquency ratio of South Korean lenders stood at 1.46 percent as of
the end of March, up from 1.1 percent three months earlier.
pbr@yna.co.kr
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