Financial Vulnerability

The net inflow of foreign capital into the South Korean stock market totaled US$1.245 billion in December last year while Asian countries such as India, Indonesia and Vietnam saw net outflows.
The net inflow of foreign capital into the South Korean stock market totaled US$1.245 billion in December last year while Asian countries such as India, Indonesia and Vietnam saw net outflows.

 

According to the Korea Center for International Finance and Bloomberg, the net inflow of foreign capital into the South Korean stock market totaled US$1.245 billion in December last year whereas the net outflow had amounted to US$436 million in the previous month.

In the last month of last year, India, Indonesia, the Philippines and Vietnam recorded a net outflow of US$1.15 billion, US$273 million, US$191 million and US$50 million, respectively. Some experts pointed out that this evidences South Korea’s robust economic fundamentals.

Still, the others are saying that the foreign capital is likely to leave South Korea sooner or later. According to them, the South Korean capital market, which has a very high degree of openness, is first in line for foreign investors wishing to prepare cash. “The record high level of household debts amounting to more than 1,300 trillion won, the slowdown of the growth of major industries and political risks represented by the Choi Soon-sil scandal are reducing the attractiveness of South Korea as an investment destination,” one of them mentioned.

Last year, BNP Paribas calculated the levels of vulnerability of various countries to the election of Donald Trump as the U.S. President. According to the result, South Korea is the third most vulnerable among 20 emerging countries, following Malaysia and Hungary.

 



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