Latest news with #KospiIndex
Business Times
3 days ago
- Business
- Business Times
South Korean stocks rise to enter bull market, bonds sink after presidential election outcome
[SEOUL] South Korea's equity benchmark climbed to enter a bull market, after Lee Jae-myung's widely-expected win in the presidential election ended a months-long political leadership vacuum. The Kospi Index ended 2.7 per cent higher on Wednesday (Jun 4), taking its gain from the April low to more than 20 per cent as investors piled into potential beneficiaries of Lee's reform and growth agenda. Holding companies, financial firms and brokerage stocks charged the Kospi higher on anticipation that Lee would seek to implement a key legislative change as early as this month that aims to boost shareholder returns. The won rose 0.7 per cent against the US dollar, extending its rally into a second trading session. South Korean government bonds underperformed with the 10-year yield rising about ten basis points – while the bond futures of the same tenor dropped to the lowest since January – reflecting concerns about more supply due to the new administration's likely expansionary fiscal policy. The election outcome removes one of the biggest overhangs impacting the local market – how the country proceeds politically after former president Yoon Suk-yeol's brief imposition of martial law last December, which led to his ouster and Tuesday's snap election. Market focus now turns to Lee's policies aimed at shoring up growth, centreed on more government spending, improved corporate governance and stronger labour protections, as well as wrapping up ongoing tariff negotiations and currency talks with the Trump administration. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up South Korea's economy contracted in the first quarter, underscoring its weakness even before US President Donald Trump's announcement of tariff hikes in early April. But the post-election rally was a sign that investors are anticipating a longer-term structural rebound in the market, Han Sang-kyoon, chief investment officer at Quad Investment Management, said. 'For the first time in history, we have a president who promised to strengthen the corporate boards' fiduciary duty to shareholders,' he said. 'This is very positive because it would resolve what the market sees as the biggest cause of the Korea discount.' Despite political uncertainties and a sluggish economy, Korean stocks and the won have shown resilience this year, outperforming most of their Asian peers. The won got support after Yoon was removed in April, and it's one of Asia's best performers. The Kospi is up 15 per cent so far this year, reflecting investors' scouring for value after it dipped into a bear market earlier this year on concerns over US tariffs. The rally has extended across different sectors, with more stocks hitting their 52-week high late last month than at any point in recent years. On the campaign trail, Lee stated his target for Kospi was to reach the 5,000 level, a sharp jump from the current level, and vowed to end the 'Korea discount.' Lee's emphasis on corporate reform 'would pave a path for valuation re-rating,' Han said, predicting that legislative changes that target increasing dividends and shareholder returns could push the Kospi above the 4,000 level. The sectors linked to his policies made notable moves Wednesday. Shares of brokers, such as Korea Investment Holdings, jumped as investors bet on Lee's pledges to lift stocks. Shares of holding companies, which control South Korea's conglomerates, also spiked on expectations that Lee's reform agenda would spur more dividend payouts and share buybacks. They have been the poster child of the Korean discount as their market valuations are often less than the combined value of the stakes they hold in their subsidiaries. Unlike his predecessor, Lee will have the National Assembly in his corner. His party's control of the unicameral legislature may accelerate the implementation of election pledges, Jin-Wook Kim, an economist at Citigroup, said. Still, the bond market move was a reminder that investors are keeping tabs on potential risks, including possibly more debt. Relatively strict labour regulations and direct debt relief for small businesses also could be on the horizon that may cloud the outlook, Kim said. BLOOMBERG
Business Times
3 days ago
- Business
- Business Times
Korean stocks rise to enter bull market, bonds sink after vote
[SEOUL] South Korea's equity benchmark climbed to enter a bull market, after Lee Jae-myung's widely-expected win in the presidential election ended a months-long political leadership vacuum. The Kospi Index ended 2.7 per cent higher on Wednesday (Jun 4), taking its gain from the April low to more than 20 per cent as investors piled into potential beneficiaries of Lee's reform and growth agenda. Holding companies, financial firms and brokerage stocks charged the Kospi higher on anticipation that Lee would seek to implement a key legislative change as early as this month that aims to boost shareholder returns. The won rose 0.7 per cent against the US dollar, extending its rally into a second trading session. Korean government bonds underperformed with the 10-year yield rising about ten basis points – while the bond futures of the same tenor dropped to the lowest since January – reflecting concerns about more supply due to the new administration's likely expansionary fiscal policy. The election outcome removes one of the biggest overhangs impacting the local market – how the country proceeds politically after former President Yoon Suk-yeol's brief imposition of martial law last year, which led to his ouster and Tuesday's snap election. Market focus now turns to Lee's policies aimed at shoring up growth, centreed on more government spending, improved corporate governance and stronger labour protections, as well as wrapping up ongoing tariff negotiations and currency talks with the Trump administration. Korea's economy contracted in the first quarter, underscoring its weakness even before US President Donald Trump's announcement of tariff hikes in early April. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But the post-election rally was a sign that investors are anticipating a longer-term structural rebound in the market, Han Sang-kyoon, chief investment officer at Quad Investment Management, said. 'For the first time in history, we have a president who promised to strengthen the corporate boards' fiduciary duty to shareholders,' he said. 'This is very positive because it would resolve what the market sees as the biggest cause of the Korea discount.' Despite political uncertainties and a sluggish economy, Korean stocks and the won have shown resilience this year, outperforming most of their Asian peers. The won got support after Yoon was removed in April, and it's one of Asia's best performers. The Kospi is up 15 per cent so far this year, reflecting investors' scouring for value after it dipped into a bear market earlier this year on concerns over US tariffs. The rally has extended across different sectors, with more stocks hitting their 52-week high late last month than at any point in recent years. On the campaign trail, Lee stated his target for Kospi was to reach the 5,000 level, a sharp jump from the current level, and vowed to end the 'Korea discount.' Lee's emphasis on corporate reform 'would pave a path for valuation re-rating,' Han said, predicting that legislative changes that target increasing dividends and shareholder returns could push the Kospi above the 4,000 level. The sectors linked to his policies made notable moves Wednesday. Shares of brokers, such as Korea Investment Holdings, jumped as investors bet on Lee's pledges to lift stocks. Shares of holding companies, which control Korea's conglomerates, also spiked on expectations that Lee's reform agenda would spur more dividend payouts and share buybacks. They have been the poster child of the Korean discount as their market valuations are often less than the combined value of the stakes they hold in their subsidiaries. Unlike his predecessor, Lee will have the National Assembly in his corner. His party's control of the unicameral legislature may accelerate the implementation of election pledges, Jin-Wook Kim, an economist at Citigroup, said. Still, the bond market move was a reminder that investors are keeping tabs on potential risks, including possibly more debt. Relatively strict labour regulations and direct debt relief for small businesses also could be on the horizon that may cloud the outlook, Kim said. BLOOMBERG
Yahoo
3 days ago
- Business
- Yahoo
Tariffs, North Korea Cast Shadow Over Lee's First Day in Office
(Bloomberg) -- South Korea's newly elected President Lee Jae-myung took office with a pledge to revive a national economy threatened by Donald Trump's tariffs just as the US president doubled duties on steel and aluminum, highlighting the pressing challenges facing the Asian leader. Where the Wild Children's Museums Are Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry The Global Struggle to Build Safer Cars At London's New Design Museum, Visitors Get Hands-On Access LA City Council Passes Budget That Trims Police, Fire Spending 'We will start by restoring people's livelihoods and reviving the economy,' Lee said at an inauguration ceremony at the National Assembly in Seoul on Wednesday, hours after he won the country's presidential election. 'We will revive the virtuous cycle of the economy by using the national budget as a catalyst.' Lee's first day in office was greeted by Trump's raising of import taxes on steel and aluminum to 50% from 25%. South Korea also faces a 25% across-the-board levy that was later temporarily reduced to 10% for 90 days, in addition to sectoral tariffs imposed on cars, steel and aluminum. Trade talks with the US will provide an early test of Lee's ability to balance foreign policy ties with domestic concerns, with exports equivalent to more than 40% of South Korea's gross domestic product. Lee, who is expected to speak to Trump soon, has said policymakers shouldn't rush into a deal with the US. Lee earlier said he'd 'crawl through Trump's legs if needed' to get a good deal for South Korea. Tuesday's vote was largely seen as a referendum on Lee's ousted predecessor's botched attempt to impose martial law in the longstanding US ally. Lee won the race with 49.4% of the vote, a comfortable victory over the conservative People Power Party's Kim Moon-soo, though not the landslide that looked possible earlier in the year. On the campaign trail, Lee said he would use up to 35 trillion won ($25.4 billion) in a stimulus package if elected to provide aid to households and businesses. That was already an increase from the 30 trillion won figure he started the campaign with. The sense that Lee's administration will be looser on fiscal policy than Yoon Suk Yeol's appeared to ripple through bond markets, pushing the price of 10-year futures on government debt down by more than 100 basis points. Still, stock investors cheered the prospect of a return to political stability and corporate governance reforms. The Kospi Index jumped as much as 2.5% on Wednesday, taking its gain from the April low to more than 20% as investors piled into potential beneficiaries of Lee's reform and growth agenda. In a speech heavy on rhetoric about uniting the nation, Lee also vowed to continue efforts to step up trilateral cooperation with the US and Japan based on a strong alliance with the US and a practical approach to diplomacy. But in a departure from the Yoon administration's hardline stance on North Korea, Lee said South Korea will seek to restore communication channels with North Korea. Any dialogue would take place from a position of strength he said, adding that South Korea's defense budget is twice the size of North Korea's economy. 'No matter how expensive peace is, it is better than war,' Lee said. 'It is better to win without fighting than to win by fighting, and the most reliable security comes from a peace without the need to fight.' The US congratulated Lee on his victory and pledged to continue coordinating security efforts in a bid to modernize their alliance. 'The United States and the Republic of Korea share an ironclad commitment to the Alliance grounded in our Mutual Defense Treaty, shared values, and deep economic ties,' US Secretary of State Marco Rubio said in a statement. 'We will also continue to deepen U.S.-Japan-ROK trilateral cooperation to bolster regional security, enhance economic resilience, and defend our shared democratic principles.' Demonstrating the pressing security challenges facing the new leader, a top security aide to Russian President Vladimir Putin, Sergei Shoigu, arrived in Pyongyang for talks with North Korea's Kim Jong Un, Tass reported Wednesday. Shoigu's visit, following his March trip during which he briefed Kim on US-brokered negotiations to end the war in Ukraine, comes two days after Moscow and Kyiv agreed on a new exchange of prisoners during their second round of peace talks in Istanbul. Shoigu and Kim are set to discuss the situation around Ukraine and bilateral military ties, including 'immortalizing' North Korean troops who fought against Ukraine alongside Russian troops, Interfax said. Kim has emerged as a key ally of Putin since they struck a military treaty a year ago, and his deployment of soldiers raised concerns about the North Korean military's exposure to the real-world and modern combat experience. Lee appointed Wi Sung-lac, a member of his Democratic Party who was once South Korea's top nuclear negotiator with North Korea, as his national security advisor. Lee's top campaign aide and DP lawmaker Kim Min-seok was nominated as the prime minister and Lee Jong-seok, who served as South Korea's unification minister in 2006, was named the country's spy agency chief. --With assistance from Jaehyun Eom, Youkyung Lee and Sanjit Das. (Updates with statement from US Secretary of State Rubio.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? ©2025 Bloomberg L.P. Sign in to access your portfolio
Straits Times
3 days ago
- Business
- Straits Times
South Korean stocks eye bull market as new President Lee's win fuels reform bets
South Korea's Kospi Index jumped as much as 2.5 per cent while the won rose 0.5 per cent against the US dollar. PHOTO: REUTERS SEOUL – South Korea's equity benchmark climbed and is on track to enter a bull market, after Lee Jae-myung's widely-expected win in the presidential election ended a months-long political leadership vacuum. The Kospi Index jumped as much as 2.5 per cent on June 4, taking its gain from the April low to more than 20 per cent as investors piled into potential beneficiaries of Mr Lee's reform and growth agenda. Holding companies, financial firms and brokerage stocks charged the Kospi higher on anticipation that Lee would seek to implement a key legislative change as early as this month that aims to boost shareholder returns. The won rose 0.5 per cent against the US dollar, extending its rally into a second trading session. Korean government bonds underperformed with the 10-year yield rising about ten basis points – while the bond futures of the same tenor dropped to the lowest since February – reflecting concerns about more supply due to the new administration's likely expansionary fiscal policy. The election outcome removes one of the biggest overhangs impacting the local market – how the country proceeds politically after former President Yoon Suk Yeol's brief imposition of martial law in 2024, which led to his ouster and June 3's snap election. Market focus now turns to Mr Lee's policies aimed at shoring up growth, centered on more government spending, improved corporate governance and stronger labour protections, as well as wrapping up ongoing tariff negotiations and currency talks with the Trump administration. South Korea's economy contracted in the first quarter, underscoring its weakness even before US President Donald Trump's announcement of tariff hikes in early April. But the post-election rally was a sign that investors are anticipating a longer-term structural rebound in the market, Han Sang-Kyoon, chief investment officer at Quad Investment Management, said. 'For the first time in history, we have a president who promised to strengthen the corporate boards' fiduciary duty to shareholders,' he said. 'This is very positive because it would resolve what the market sees as the biggest cause of the Korea discount.' Despite political uncertainties and a sluggish economy, South Korean stocks and the won have shown resilience this year, outperforming most of their Asian peers. The won got support after Mr Yoon was removed in April, and it's one of Asia's best performers. The Kospi is up 15 per cent so far this year, reflecting investors' scouring for value after it dipped into a bear market earlier this year on concerns over US tariffs. The rally has extended across different sectors, with more stocks hitting their 52-week high late last month than at any point in recent years. On the campaign trail, Mr Lee stated his target for Kospi to reach the 5,000 level, a sharp jump from the current level, and vowed to end the 'Korea discount.' His emphasis on corporate reform 'would pave a path for valuation re-rating,' Mr Han said, predicting that legislative changes that target increasing dividends and shareholder returns could push the Kospi above the 4,000 level. Unlike his predecessor, Mr Lee will have the National Assembly in his corner. His party's control of the unicameral legislature may accelerate the implementation of election pledges, Jin-Wook Kim, an economist at Citigroup, said. Still, the bond market move was a reminder that investors are keeping tabs on potential risks, including possibly more debt. Relatively strict labour regulations and direct debt relief for small businesses also could be on the horizon that may cloud the outlook, Citigroup's Mr Kim said. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Time of India
3 days ago
- Business
- Time of India
Asian shares: Asian shares rise at open after US jobs surprise
ADVERTISEMENT ADVERTISEMENT ADVERTISEMENT Asian stocks rose at the open after data showed the US labor market is holding up despite concerns about risks from President Donald Trump's tariff war.A regional gauge rose 0.3%, its first advance in four days. South Korean stocks led the moves with a 1.6% jump for the Kospi Index after the country elected a new president, capping six months of chaos. The dollar was steady in early Asian trading after gaining in the prior session. The S&P 500 rose 0.6% while the Nasdaq 100 advanced 0.8%.Just days ahead of the US payrolls report, an unexpected increase in job openings buoyed sentiment during the US trading session. That helped offset earlier losses in stocks after the Paris-based OECD said Trump's combative trade policies have tipped the world economy into a downturn, with the US among the hardest hit.'Further signs of resilience in the US economic data are pushing the US stock market higher despite continued downside risks from US trade policy,' Kyle Rodda, a senior market analyst at wrote in a note Wednesday. 'Wall Street defied recent tariff hikes and signs of reinflamed tensions between the US and China to rise once again.'The rise in job openings reinforced the Federal Reserve's assertion that the labor market is in a good place. While some economists fear a more notable weakening in coming months under the weight of tariffs, that hasn't shown up in the data yet, supporting officials' posture to keep rates swaps market continues to price in two Federal Reserve rate reductions this year beginning in October. However, traders are ramping up bets that hedge against dramatic shifts in the path as questions on the economic impact of Trump's administration evolving policies higher-than-expected job openings number 'is a good sign for the economy, as many were worried that the tariff uncertainty was weighing too heavily on businesses,' said Chris Zaccarelli at Northlight Asset the trade front, the US reiterated that Trump and Chinese President Xi Jinping will talk 'very soon.' The administration is actively monitoring China's compliance with the Geneva trade agreement, White House Press Secretary Karoline Leavitt Office of the US Trade Representative has sent letters to trading partners to remind them of an upcoming deadline in negotiations, according to the White House. Commerce Secretary Howard Lutnick said he's 'very optimistic' about prospects for a deal between the US and Asian corporate news, Toyota Industries Corp . shares slumped 13% after a privatization Trump signed a directive raising steel and aluminum tariffs to 50% from 25% starting Wednesday, following through on a pledge to boost import taxes to help domestic manufacturers. Prices for the metals in the US surged on Monday.
