and time now for an in-depth look at the market news this afternoon for that i'm joined on the
line for by dr kim sewan professor of economics at ewa women's university professor kim good
afternoon thanks for coming on today good afternoon devin well let's start with the
finance ministry's green book report for july it says volatility continues in the financial markets
because of inflation rising interest rates and a slowdown in china downside risks are expanding the
first mention of an economic slowdown for korea came in last month's green book and
it's the same this month so professor what do you make of the latest report in recently released uh
grim which is the official report of the korean government on korean economic status government
warns further decline of economy for this year as external factors are not improving along with
high rising inflation also export growth could lose stem amid deteriorating external economic
conditions market volatility and and global economic downside risk further increased from
the federal reserve fast rate hikes uh china's economic slowdown and protracted were between
russia and ukraine but a positive side of the economy is that domestic demand has been on a mild
recovery track on improvement in the job market and a rebound in person services in june uh korean
government lowered this 2022 economic growth outlook to 2.6 from his earlier forecast of 3.1
it also sharply raised this year's inflation outlook to a 14-year high of 4.7 from 2.2 percent
well to look at the equity markets amid all this volatility uh wall street overnight saw
a big rebound on earnings banks doing well the dow is up almost two and a half percent the s p
more than 2.7 percent and the nasdaq three percent what's the story in the global equity markets
u.s stock indexes recorded their biggest one-day gains in nearly a month a tuesday as investors
reacted positively to a fresh batch of company earnings report particularly in commercial banks
the s p 500 added 2.8 percent uh the tech focus nasa composite gained the 3.1 percent and the
belgium's industrial average rose 2.4 percent investors are parsing earnings report to determine
how decades high inflation is affecting corporate profits and and consumer spending uh economists
uh have been raising the estimated chances of a u.s recession within next 12 months worried
that the higher interest rate put in place by the federal reserve to curb inflation will weigh on
economic growth all asian markets moved higher today along with yesterday's united states market
nikkei 225 gained 2.7 percent and shanghai index and hong kong's hong kong index both advanced by
0.8 and one point four percent uh as of 3 pm is all time well asian markets up including korea's
uh in line with these gains in the other markets stronger than expected earnings from netflix in
the us or subscriber numbers rather pushing up stocks related to korean content studio dragon
was up more than five percent tell us about the domestic market today uh domestic markets also
advanced supported by u.s and other major markets big rise yesterday domestic investors do not
find a significant direction of market under declining markets from the end of last year
so u.s markets big rise yesterday became a trigger to raise domestic equity demand today
the benchmark cost became point seven percent and costa also advanced one point one percent today
in cosby market individual investors uh nat boat 6 65 billion one which was a major driving force
among the investor groups uh movements uh most of the logic cap stocks gained today as a as
the whole market expands the second largest size lg energy solution uh rose point three percent
and sk hynix also gained two percent and so on but the largest sized capital uh
samsung electronics retreated 0.7 and kia motors also lost 0.6 today
well all eyes are on the exchange rate professor uh it's been holding above 1301 to the dollar
about the highest level since 2009 korea's national pension service is hedging the
currency aggressively reports say korea has one of the biggest state pension funds in the world
and the biggest the biggest investor in korea what does all this currency volatility mean for
the national pension as one dollar exchange rate goes up uh import price goes up quickly
so so recently weakening one korean one against the us dollar became additional strong power
to raise domestic price level government tried to actually stabilize exchange rate
for months through currency market intervention but it did not work and then government recognized
that national pensions massive foreign equity purchases are one important factor that
raised one dollar exchange rate in national pensions portfolio over uh nine hundred
trillion one uh four inequities cover about thirty percent of total portfolio over 270 trillion one
but national pension says uh in the next five years they will buy more foreign equities up to
50 percent of total portfolio yesterday department of finance recommended that national pension would
use foreign exchange hatch which lessens national pensions dollar buy to purchase for inequity uh
i think national pension will accept government guidance on forty next four intercept purchases
very soon then it would be a partial uh help to stabilize the exchange rate a lot of demand
on that pension coming uh in the next few decades professor we'll have to keep an eye on that thank
you as always for coming on the program professor we really appreciate it thank you very much