South Korea

We highlight the 10 best- and 10 worst-performing EM stocks based on share price change this year. South Korea’s EcoPro, Taiwan’s Wistron and Taiwan’s Quanta Computer top the list of the best-performing stocks. China's Li-Ning, JD.com and Meituan top...

Ecuador topped eurobond gains Friday, +2.6% rebounding from 11% sell-off last week following Noboa default risk warnings. Ghana topped eurobond losses Friday, -1.7%, extending prior week's -3.6% losses. GABON '25s rebound 0.6% today after AfDB lifted...

Short-selling until end June 2024 but no crisis of the sort that prompted previous bans (eg 2008 GFC, 2020 Covid). An attempt to woo retail investor base pre-April 2024 legislative election, where they make up a quarter of electorate. Short-selling...

Panama: Fiscal uncertainty on the rise as mining bill returns to drawing board. Guatemala: President-elect Arévalo met with the US State Secretary and received further support. Gran Tierra Energy announces 91% acceptance rate for exchange offers of i...

President Yoon Suk-yeol's party currently has merely 37% of parliamentary seats; next election in April 2024. Parliamentary vote to proceed with corruption case on opposition leader Lee Jae-muyng implies defections in his party. End of split governme...

Korean officials pointed to the need to correct Korea’s restrictive FX market structure. Many believe that one of the key goals of improving FX accessibility to Korea's markets is to achieve high-profile inclusions into developed market benchmark indices. Some estimates put potential WGBI-related inflows into KTBs as high as $50bn.

Biden deal with Vietnam upgrades Obama's 2013 one: Vietnam and US trade and security have grown closer for years. Vietnam as important to US encirclement of China as Japan, Korea, Malaysia, Philippines, and Taiwan. Vietnam paradox: 'China plus' manuf...

China's latest national map reasserts territorial claims disputed by India, Malaysia, Philippines, Vietnam and Taiwan. Reminder of where future conflicts are possible, where China has overwhelming military superiority unless US intervenes. Catch-22 f...

Huawei's Mate 60 Pro 5G smartphone uses SMIC's Kirin 9000s chip, which is built using 7nm technology. Huawei and SMIC sanctioned by US, which also blocks 16nm and below chip making equipment and end product sales to China. So, China is innovating alt...

China property and stimulus woes, Thailand rivals unite, Turkey corrects, Argentina election surprise, BRICS sideshow. No single theme leads in 2023: Strong sovereigns, manufacturing, commodities, tourism, tech, reform all have a place. EM and FM sti...

Argentina's EFF arrangement passed its 5th/6th board reviews yesterday, allowing immediate disbursement of US$7.5bn. Nigeria's CBN told Wema Bank to stop foreign currency-secured loans in latest sign of slowing FX liberalisation momentum. Sri Lanka p...

The US-Japan-Korea trilateral is another reminder that China is losing out in the friction with the US. And that the opportune moment for a quick and successful Taiwan invasion is a long way off. Invasion bets (HK dollar or TSMC collapse) are based o...

EM eurobonds were flat yesterday, with support from -8bps move in US 10yr yields offset by losses led by LatAm (-0.2%). China's import and export growth both surprised to the downside today. APAC currencies fell, with AUD and KRW down 0.4%. Lebanon e...

India's ability to capture an increasing share of foreign institutional flows into emerging markets reflects an improvement in the market's risk-return profile. Chinese authorities have followed through with plans to stimulate domestic consumption within the automobile, property and leisure industries. China was the best performer as authorities rolled out plans to revive domestic consumption and spur private investment.

Lebanon topped eurobond gains again yesterday following optimism around new central bank leadership. EM sovereign eurobond spreads widened by 4bps, the most since early July, led by a 8bps increase in high yield spreads. US treasuries shrugged off Fi...

Ukraine bonds rallied 11.5% yesterday and 45.8% over past month on positive sentiment around NATO membership. Pakistan eurobonds up 3.4% yesterday on final approval of IMF US$3bn SBA. Moderated today, with PKSTAN '31s down 1%. Zambia: IMF approved US...

A busy economic calendar for the week ahead is filled with more inflation numbers, notably from the UK, eurozone and Japan. Meanwhile a series of data releases from mainland China will include eagerly awaited GDP details for the second quarter. A G20 meeting will also bring together finance ministers and central bankers, unfolding all in a week which leads up to the flash July PMI data.

Inflation data in the US takes centre stage in the coming week as investors seek guidance on the Fed's next steps after it paused its rate hikes in June. In Europe there will be new data for the hawkish-sounding Bank of England and ECB to digest via UK GDP and labour market data, as well as Eurozone industrial production and trade statistics. Key data releases will also add insights into whether Beijing will add more stimulus to help its struggling post-pandemic recovery.

South Korea's real GDP grew at a pace of 0.3% quarter-on-quarter (q/q) in the first quarter of 2023, showing a return to moderate positive growth after contracting by 0.4% q/q in the fourth quarter of 2022. On a year-over-year (y/y) basis, real GDP growth slowed to an increase of 1.8% year over year in first quarter 2023. Weak economic growth in the US and the European Union (EU) remain a key downside risk for South Korea's manufacturing export sector in the second half of 20 23 and into 2024.

Inflation readings will be highlights in the final week of June as markets grapple with the likelihood of further interest rate hikes. US core PCE will be due, in addition to Canada and eurozone CPI. US consumer spending will shed light on the expected inflation path. UK GDP and industrial production figures from various APAC economies will help assess recession risks.

Surprises: AI Tech cycle, weak China growth, policy corrections in Bangladesh, Nigeria, Turkey. Outperformers: Korea-Taiwan (Tech), Brazil-Mexico (carry trade), Saudi (reform) in Large EM, Dubai, E Europe in Small EM. Strategy: Cheap plays on multipl...

Index provider MSCI reviews its classification of markets: this usually lags fundamentals but index-led flows matter. Korea stays in EM: not a surprise to us and not necessarily a bad thing because shift to DM might lead to net outflows. Egypt (FX fr...

US Secretary of State Blinken visits China amid very low expectations of a defrosting of relations. For China, its fractious US relations compounds sluggish post-Covid growth and drip-feed stimulus. For others in EM, US-China friction means opportuni...

Full FX convertibility unlikely before late 2024 and is one of the main obstacles for Korea to move from MSCI EM to DM. Korea is 12% weight in MSCI EM. It might be 1.5% in DM and 5% in EAFE. An upgrade might even lead to negative flows. Forget the in...

Equity markets are mostly weaker, and benchmark 10-year yields are a little softer. The foreign exchange market is subdued ahead of today’s US CPI. The dollar has been confined to narrow ranges against the G10 currencies. The rapprochement between Japan and South Korea may be among the most important diplomatic developments.