Performance Crisis
The Korea Composite Stock Price Index (KOSPI) is showing a negative outlook for October due to the end of the tapering, slowdown of the Chinese economy, and listed companies’ Q3 performance forecast being lower than previous expectations.
According to industry sources, an increasing number of foreign investors are predicted to leave the Korean and other emerging stock markets with the end of quantitative easing drawing near. They, in fact, have continued their net selling since mid-September.
“The net selling trend is likely to continue for a while based on the monetary policy of the Fed,” said Kim Hak-kyun, investment strategy manager at KDB Daewoo Securities, adding, “Investors would be well advised to take a defensive position with market volatility going up.”
Besides, concerns over declined annual corporate profits are on the rise. For instance, Samsung Electronics’ operating profits are estimated to have dropped at least 30 percent from a year earlier.