24119
S. Korean Investors Lose Confidence, Withdraw Cash From ETF
World Economy

S. Korean Investors Lose Confidence, Withdraw Cash From ETF

The iShares MSCI South Korea capped ETF, the largest exchange-traded fund tracking the country’s stocks, had the biggest weekly withdrawal since inception in 2000 amid investor concern over a revival of tensions on the Korean peninsula and an escalating selloff in emerging markets.
Traders pulled $195.4 million from the ETF, whose top holdings include Samsung Electronics Co. and Hyundai Motor Co., in the five trading days ended Aug. 21, according to data compiled by Bloomberg.
The fund, which has $3.1 billion in assets, fell 7.2% in New York to an almost four-year low of $45.67 during the week and is down 27% from a high in April.
Investors are losing confidence that South Korea can defuse tensions with its neighbor and withstand a slowdown in China, its biggest trading partner, according to Ankur Patel, chief investment officer at R-Squared Macro Management. North Korean leader Kim Jong-Un has threatened to launch an attack after exchanging fire across the border earlier this month in what is becoming one of the most serious confrontations between the two countries in recent years.
While the South Korean government pledged to stabilize financial markets amid provocations from the North and the fallout from China’s growth, there is only so much the Bank of Korea can do to prevent investors from exiting. More than $3.3 trillion has been erased from the value of global equities after China’s decision to devalue its currency spurred a wave of selling across emerging markets.
“South Korea itself can’t dictate its fortunes from here on,” Patel said by phone from Birmingham, Alabama.
The central bank has cut interest rates four times in the past year to a record low of 1.5% and the government introduced its largest-ever budget this year.
Bearish bets against the Korea ETF have tripled in the past month to 2.2% of shares outstanding on Aug. 20, according to data compiled by Markit, a London-based research firm.

 

Short URL : https://goo.gl/HmsloV
  1. https://goo.gl/Qhhkzo
  • https://goo.gl/G3oZkx
  • https://goo.gl/2IbDcg
  • https://goo.gl/lkYbKV
  • https://goo.gl/ecL1y1

You can also read ...

Japan Mulls  US-Free TPP Deal
Japan is ready to relaunch the Trans-Pacific Partnership minus...
IMFC Pledges Joint Efforts  to Reduce Global Imbalances
The IMF’s steering committee adopted the position on trade taken...
Finns are working longer hours for lower pay.
Finland’s economic stewards, used to presenting bad news, are...
Colombia CB Sees Room to Cut Rate
Colombia can cut its policy rate toward a more neutral level as...
Germany Unmoved by US Corporate Tax Plans
German Finance Minister Wolfgang Schaeuble is not worried by the...
France seems to be going from strength to strength as the PMI for manufacturing and services rose to 56.7 in April from 56.4 in March.
Europe’s political fog may finally start to lift in the coming...
Malta BCI Favorable
Malta’s business conditions have remained favorable, according...
Malaysia Reaches 1MDB Bond Deal
The battle over the repayment of 1MDB bonds may be coming to an...

Trending

Googleplus