Wuhan Coronavirus Casts Cloud over Stock Market
Short-term financial products such as money market funds (MMFs) are attracting more and more money. Although the South Korean stock market was expected to attract investors with real estate regulations strengthened and listed companies’ business performances improving, the Wuhan coronavirus cast a cloud over the stock market and investors are keeping their money in MMFs.
The Korea Financial Investment Association announced on Feb. 10 that the total balance of MMFs amounted to a record high of 140.4 trillion won on Feb. 6 and those products attracted no less than 11.4 trillion won in the latest week alone.
This is because of the lack of alternative investment opportunities. The South Korean government added regulations to the real estate market on Dec. 16, 2019 by prohibiting a loan for a house priced at 900 million won or more and the prohibition led to less investment demand in the real estate market.
Early this year, the local stock market was expected to absorb the money with the market expected to rally based on listed companies’ improved business figures. However, the Wuhan coronavirus broke out all of a sudden, adding volatility to the market to the point of hindering the flow of money.