In-depth: Global market wrap-up

In-depth: Global market wrap-up


time now for an in-depth look at the
market news this afternoon and for that I’m joined on the line by dr. kim
sehwang professor of economics at ey Woman’s
University professor Kim thank you for coming on today
good afternoon Devon the Bank of Korea just today decided to keep its key
interest rate where it is at one and a quarter percent there’s been speculation
of course that it might cut because of the economic impact of the corona virus
outbreak what’s the significance of an interest rate freeze at this point Bank
of Korea has kept this policy rate steady at current 1.25 percent in the
middle of growing economic fallout from current of our virus outbreak as you
said previously some financial market participants expected interest rate cut
by central banks because coronavirus impact on economies becoming more
serious however it looks that Bank of Korea believes that this is not the time
of action instead as of now Bank of Korea is only watching how much a corona
virus outbreak is affecting Korean economy also central bank is worrying
about lower interest rate causes or not all bubbles in housing market and and
more depreciation of Korean Won yeah a lot of factors clearly pulling in
different directions there in that decision
but speaking of dealing with the virus the government’s looking to set up an
extra budget for the to support the economy so I’m saying it’ll be worth 10
trillion won or or more what do you make of this idea and what do you expect will
happen it is that that government and ruling party together are designing over
10 trillion won supplementary budget for Labyrinth in 2015
MERS outbreak the supplementary budget was about 11 points
eleven point six billion won and under these circumstances it is necessary to
draw up supplementary budget because the fallouts of domestic
consumption and investment it means that the only part that can support the
economy is government government expenditure also supplementary budget is
essential for providing appropriate resources to Crenn virus-infected people
and regions well looking at other parts of the markets US stocks were mostly
down again on Wednesday it’s been a rough week or two because of the corona
virus outbreak what’s the story on Wall Street New York stock market was pretty
mixed yesterday some positive views are a kind of neutralized by increasing
concerns on Crump virus spread in the United States thousands industrial
decreased by 46 basis point but Nasdaq increased by 17 basis point major
European markets slightly increased except dreamer market yesterday yeah and
here it’s been of course wild ride in Korean stocks as well today they’re down
a fair bit again with they’ve gotten slammed in the past couple of weeks tell
us about that domestic stock market is still heavily oppressed by Konnor virus
outbreak concerns rapidly and continuously increasing number of
impacted people gave negative impact on domestic market and real sector to today
kospi dropped by 1.05 percent and Casta decreased by two point 51 percent
so these numbers are huge numbers in a single day’s movements for inner foreign
investment and domestic institutional investors sold start today and today a
Japanese market also decreased over two point 15 percent in a single day now
here in Korea we have business sentiment numbers showing that it’s fallen among
Korean companies by the biggest amount on record because of the coronavirus we
know that it’s really hurting small business how has this affected different
sectors in particular and what else is in the bank of Korea’s report for
February according to recent business sentiment survey February’s this
sentiment index decreased down to 78 level which is the lowest level in 11
years the general way of interpreting business sentiment index is when it is
lower than hundred that is negative sign so these low business sentiment is
affected by of course kernel virus outbreak the most affected businesses
are as we expect trouble and transportation and automobile and
petrochemical industries so recently also released bank of Korea’s consumer
sentiment dropped in a large scale so we can say that both of the consumers and
manufacturers are suffering from current virus outbreak and things seem to be
turning around there you know a couple of months ago and this is just out of
the blue this this virus is sort of put a major dent in all that but Professor
Kim always a pleasure to have you on thanks so much for sharing your insights
thank you very much