Korean Job Discussion Forums

[bassexpander]

The benchmark Korea Composite Stock Price Index yesterday plunged 59.81 points, or 4.06 percent, to 1,414.43, falling to its lowest since March 2007. The Korean won weakened to 1,116 against the dollar, down 27 won from Friday's close. The exchange rate breached the 1,100-mark for the first time in almost four years.

A steep loss at Wall Street over the weekend deteriorated investor sentiment and the massive selling spree in the stock market exacerbated volatility in the foreign exchange market, analysts said.

The analysts said that the market turbulence shows that policymakers' assurance that Korea is not facing a liquidity crisis is not working well.

The nation's financial regulators and policymakers reaffirmed their official stance that concerns over a credit crisis were be overblown. The foreign currency authorities, who have largely refrained from playing an active role in the market, said they would not tolerate the won's drastic decline.

"We're very concerned about the won's excessive drop. We will take necessary steps if the decline goes on," said Choi Jong-ku, director general of the Finance Ministry's international Finance Bureau.

The Financial Services Commission yesterday held an unscheduled press conference to reassure investors that the slump in the stock market will be short-lived. Hong Young-man, head of the FSC's capital market policy, urged the nation's pension funds to increase their purchase in the local equity market to help prevent the stock from sliding further.

The financial regulator does not consider any direct stimulus packages to boost the stock market. Instead, Hong said, the financial regulator will extend a tax exemption for mutual funds.

"The stock market slump is not restricted to Korea, but it has more to do with worldwide financial market turmoil," Hong said.

Weaker-than-expected trade figures for August dampened weak sentiment already weighed down by a looming downside risk and a potential liquidity problem. Exports, which account for two-fifths of the nation's economy, rose 20.6 percent last month from a year earlier, according to the Ministry of Knowledge Economy. The growth figure did not live up to what many expected.

Local bonds worth $6.7 billion held by foreign investors are set to mature this month. It is almost five times higher than the monthly average value of maturing bonds held by foreigners. The massive sell-off of local bonds and shares, coupled with a months-long current account deficit, could prompt a fresh round of financial crisis in Korea, market watchers have noted.

Wall Street tumbled Friday after the government reported a decline in personal income and slowing consumer spending. Dow Jones industrial average slumped 1.47 percent and the tech-heavy Nasdaq composite index plunged 1.83 percent.

By Kim Jung-min

([email protected])

[wylies99]

Computer-based trading is now kiling us. Once the value of the won passes certain benchmarks (1100, for example) the computers are re-setting highs and lows.

[sojourner1]

Uh, Houston, we have a problem building up here.

[Rteacher]

I don't see the current level as all that bad since the exchange was 1250 won to a dollar when I first came to Korea (in 2001)

[huffdaddy]

It's at 1133 right now.

[Captain Corea]

[OnTheOtherSide]

The won just took a huge dump? Did it flush too?

Nice topic name.....

[Ya-ta Boy]

Oh ye of short experience ...when I came ('94) it was around W800 to the dollar. I stayed through the time when it was W2000 to the dollar. Things are not good right now. All you can do is hang on and hope it doesn't tank completely.

There is one good side: If the Won goes low enough, a lot of ESLers will jump ship like rats on a sinking ship. It won't help financially but it doesn't hurt socially.

[aka Dave]

God, I'm sitting on a lot of money I want to send home. So bummed by this. The Economist said the won had upside!

A shit sandwich and we all gotta take a bite.

[bassexpander]

Well, I'm here for the long haul, so I'll just wait it out.

Glad I brought a chunk of money home this past summer.

[I-am-me]

I just want to know if i should take my dollars out now!!

[Whirlwind]

This is why I don't let a lot of my money sit in Korea. The way they run things here makes me nervous. I feel much better when I transfer money out of korea. I transfer out every few months. Besides, I don't trust korean banks, I'd never want to leave a stash of money in one. The way it's always the Us vs. Them thinking here, I could imagine a scenario where a bank "loses" your stash of money and you being the foreigner have no recourse and just have to live with it. I'll pass on that one. Much better to have my money in my bank back home. More control over it.

[Zutronius]

The won continues to dive and dive today against the loonie.

For those of us whos end money home to pay off loans, OUCH.

[poet13]

The upside is at a certain point we should buy won. If we can get 1600 or more won to the dollar, eventually the currency cycle will take us back under a thousand. That's likely in the next five years. If you have a wad of cash just sitting around, a volatile currency like this (IMO) would be a good place to put it. I think the only real risk is if the currency cycle takes so long that the return becomes lower than what it would be in another investment vehicle. Just a thought.

[Draz]

You can all relax, I sent money home today so the won will make a come back within a week for sure.