{"id":104604,"date":"2017-04-10T11:35:37","date_gmt":"2017-04-10T15:35:37","guid":{"rendered":"http:\/\/countingpips.com\/?p=104604"},"modified":"2017-04-10T06:36:12","modified_gmt":"2017-04-10T10:36:12","slug":"political-scandal-rocks-south-korea","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/04\/political-scandal-rocks-south-korea\/","title":{"rendered":"Political Scandal Rocks South Korea"},"content":{"rendered":"<div id=\"inves-2203622459\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">April 10, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/1116_jail_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/1116_jail_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/1116_jail_feature-300x155.jpg 300w\" alt=\"\" width=\"580\" height=\"300\" \/><\/p>\n<p>Dear <em>Wall Street Daily<\/em> Reader,<\/p>\n<p>As someone who lives on the leading edge of technology, let me set the record straight about South Korea\u2026<\/p>\n<p>The country is a legit rock star!<\/p>\n<p>For starters, South Korea boasts the world\u2019s fastest internet connection speed.<\/p>\n<p>It\u2019s also home to technology powerhouse Samsung.<\/p><div id=\"inves-922362438\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>Most importantly, however, South Korea is a key hub for innovation incubators.<\/p>\n<p>The country registered 18,000 patents with the U.S. Patent and Trademark Office last year.<\/p>\n<p>For comparison\u2019s sake, every South American country combined registered about 750 patents.<\/p>\n<p>(Brazil sat atop South America\u2019s patent list with a measly 320 filings.)<\/p>\n<p>Armed with such technological prowess, South Korea should be represented in any truly diversified portfolio.<\/p>\n<p>Yet the nation was recently rocked by (yet another) political scandal \u2014 the result of which landed President Park Geun-hye in the clink.<\/p>\n<p>To be prudent, I asked my senior analyst, Martin Hutchinson, to unpack the situation in South Korea.<\/p>\n<p>So far, South Korean indexes are showing strength.<\/p>\n<p>In fact, the president\u2019s jailing is having virtually no effect.<\/p>\n<p>But is South Korea still a screaming buy in the face of scandal?<br \/>\n<a name=\"video\"><\/a><br \/>\nHutch\u2019s full analysis is below.<\/p>\n<p>Ahead of the tape,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <em>Wall Street Daily<\/em><\/p>\n<p><script src=\"https:\/\/fast.wistia.com\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 56.88% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\">\n<div class=\"wistia_embed wistia_async_7ra6626gx8 seo=false videoFoam=true\" style=\"height: 100%; width: 100%;\"><\/div>\n<\/div>\n<\/div>\n<p><strong>Question:<\/strong> Martin, let\u2019s address the situation in South Korea. Our readers might not be aware, but South Korea should be on their radar screens. Tell us why.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> It\u2019s got a very important technology sector and some very exciting growth companies. Also, in the past, it\u2019s been a very well-run country. So historically, you should have had some money in South Korea. Plus, the market\u2019s not overvalued at all.<\/p>\n<p><strong>Question:<\/strong> Martin, what about the political situation with the president being forced to resign?<\/p>\n<p>Martin Hutchinson: President Park Geun-hye was forced to resign on March 11 and indeed was arrested on March 31, the basic problem being corruption. It\u2019s a long-term problem in Korea, because the last opposition president, Roh Moo-hyun, was prosecuted for corruption and committed suicide in 2009 before he could be arrested. So it\u2019s clearly a problem for both sides.<\/p>\n<p>For investors, I think the outlook has turned a bit darker. Park herself was from the center-right Saenuri Party, but her economic policy wasn\u2019t very good. They\u2019ve had sluggish growth, and they\u2019ve got big problems in shipping, which is obviously not entirely her fault. The government\u2019s been expanding. It was only 24% of GDP 10 years ago, and now it\u2019s up to 32%.<\/p>\n<p>Also, the head of Samsung appears to be heading to jail. (Putting their business leaders in jail seems to be a bad habit for Korea.) It\u2019s still one of the smallest governments in the OECD (Organization for Economic Co-operation and Development), but it\u2019s only just ahead of Switzerland, though it looks like it will lose that position fairly quickly.<\/p>\n<p>In the next election, the main opposition candidate, Moon Jae-in and his Minjoo Party, favors higher public spending. They\u2019re in favor of jailing conglomerate leaders, and they jailed several of them when they were last in power in 2003\u201308. Moon himself was Roh Moo-hyun\u2019s chief of staff. They\u2019re well ahead in the polls at 35%. The Liberty Korea Party, which is what the center-right party is called now, is at 8% \u2014 with their candidate, Hong Joon-pyo.<\/p>\n<p><strong>Question:<\/strong> Hutch, that sounds messy. I know you advocate an internationally diverse portfolio. So where do you stand on including South Korean investments as part of a diversified portfolio?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Normally, I\u2019m strongly in favor of including South Korea as a substantial part of a diversified portfolio, but I think I\u2019d hold off for now. Public spending looks like it\u2019s rising faster under a left-center government. And corruption won\u2019t be addressed, in the sense that both parties seem to have corrupt presidents.<\/p>\n<p>They may well go into Keynesian deficit spending, which they haven\u2019t in the past. They\u2019ve been running budget surpluses most of the time. Their public debt\u2019s only 36% of GDP, so that\u2019s not an immediate problem. But it\u2019s obviously a red flag down the road.<\/p>\n<p>Then there\u2019s the problem of harassing chaebol [South Korean conglomerates]. It\u2019s as if the U.S. had the habit of putting the president of General Motors and the president of Goldman Sachs in jail regularly. It doesn\u2019t do much for the economy.<\/p>\n<p>Until the elections happen on May 9 and we\u2019ve had a month or so to see the new government\u2019s policies, I\u2019d suggest holding off for now. Even though South Korea should normally be part of their portfolios.<\/p>\n<p><b>Question:<\/b> OK, Hutch, so we\u2019ll put all companies domiciled in South Korea on hold for now, until you give us the all-clear. Fair enough?<\/p>\n<p><b>Martin Hutchinson:<\/b> That sounds right, and I hope to be back to you in June with some more news.<\/p>\n<p><b>Question:<\/b> Thanks for your time, Hutch.<\/p>\n<p><b>Martin Hutchinson:<\/b> Great to be with you.<\/p>\n<p><b>Question:<\/b> This is <i>Wall Street Daily<\/i> signing off.<\/p>\n<p>Smart Investing,<\/p>\n<p>&nbsp;<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/04\/10\/political-scandal-rocks-south-korea\/\" rel=\"nofollow\">Political Scandal Rocks South Korea<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com Dear Wall Street Daily Reader, As someone who lives on the leading edge of technology, let me set the record straight about South Korea\u2026 The country is a legit rock star! For starters, South Korea boasts the world\u2019s fastest internet connection speed. It\u2019s also home to technology powerhouse Samsung. Most importantly, however, South [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-104604","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=104604"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104604\/revisions"}],"predecessor-version":[{"id":104606,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104604\/revisions\/104606"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=104604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=104604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=104604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}