Feb. 24, 2014, 11:03 AM
- Hardest hit of late among regional currencies by the tumble in China's yuan is South Korea's won, reflecting the growing trade between the two countries. Correlations between the yuan and won have grown increasingly tighter over the past year, says Credit Agricole global currency chief Mitul Kotecha, and other Asian currencies have even become negatively correlated with the Chinese unit.
- Morgan Stanley data shows export exposure to China accounts for 13% of South Korean GDP - high, but not as much as Singapore (20%) and Taiwan (17%).
- South Korean ETFs: EWY, FKO, KORU, DXKW, KORZ, DBKO
Feb. 21, 2014, 4:17 PM
Jan. 31, 2014, 2:45 PM
- "We expect emerging market equities to form a base over the next few weeks, and eventually have a better year," says UBS, the team's optimism coming from a belief emerging market economies will generate solid growth in 2014.
- Earnings will be key, says UBS, noting EPS growth has collapsed since 2010, but a pickup to low double-digit growth seams feasible this year thanks to better GDP growth, currency weakness, and margin expansion. Trading at 10.1x forward earnings, EM equities are cheap.
- Favorite countries: China (FXI), Korea (EWY), Mexico (EWW), Peru (EPU), Hungary (GUR, ESR).
- EM ETFs: EEM, VWO, DEM, EDC, DGS, EDZ, EEMV, SCHE, EEB, EDIV, IEMG, DVYE, EEV, EWX, BIK, BKF, PIE, ADRE, HILO, EUM, FNI, EET, GMM, PXH, BBRC, EEMS, EELV, FEMS, DGRE, EEME, EMDD, BICK, DBEM, EMCR, FEM, EWEM, EMBB, EMLB, EVAL, TLTE, EEHB, EGRW, FNDE, EMDG, EMHD, EMSA, EMDR, EMFT, QEM, QDEM
Jan. 22, 2014, 4:18 PM
- The db X-trackers MSCI All World ex U.S. Hedged Equity Fund (DBAW) is designed to provide exposure to the global ex U.S. equity markets, both developed and emerging, while mitigating exposure to the fluctuations between the U.S. dollar and a basket of global currencies.
- The db X-trackers MSCI South Korea Hedged Equity Fund (DBKO) is designed to provide exposure to the South Korean Equity markets, while mitigating exposure to the fluctuations between the U.S. dollar and South Korean won.
- The db X-trackers MSCI Mexico Hedged Equity Fund (DBMX) is designed to provide exposure to the Mexican Equity markets, while hedging exposure to the fluctuations between the U.S. dollar and Mexican peso.
- All 3 funds will begin trading on January 23rd.
- Other ex U.S. ETFs: VEU, VXUS, SCHF, IXUS, ACWX, CWI, GWL, AADR, RTR, ACIM, VIDI
- Other ETFs covering South Korea: EWY, FKO, KORU, KORZ, DXKW
- Other ETFs covering Mexico: EWW, UMX, SMK
Jan. 3, 2014, 4:20 PM
Jan. 2, 2014, 10:40 AM
- The Korean won's strong performance over the last six months is leading a growing number of analysts to worry Samsung's (SSNLF, SSNGY) Q4 results will miss estimates.
- The company's chip business is especially vulnerable to forex swings, since it relies on dollars for order settlement. BNP Paribas estimates every 1% change in the won/dollar exchange rate hurts the op. profit of Samsung's chip division by 4%.
- Citing exchange rates and (to a lesser extent) margin pressure for Samsung's OLED display business, IBK Investment is now expecting the electronics/display/chip giant to post a Q4 op. profit of KWT9.5T ($9.04B), below a KWT10.3T Thomson Reuters consensus.
- Korean automakers Hyundai (HYMLF -5.1%) and Kia (KIMTF -6.1%) also fell hard in Seoul overnight. South Korea's benchmark KOSPI index fell 2.2%.
- Korean ETFs: EWY, FKO, KORU, KORZ, DXKW
Nov. 29, 2013, 1:27 PM
Nov. 5, 2013, 2:57 PM
- Ready to open for trade on Thursday is WisdomTree's (WETF +0.8%) Korea Hedged Equity Fund (DXKW), which is set up to offer exposure to Korean stocks without being subject to the won's fluctuations.
- The DKXW joins currency-hedged European (HEDJ) and German (DXGE) ETFs launched by WisdomTree this year as the company looks to build on the wildly successful Japan Hedged Equity Fund (DXJ).
- With $4.4B in AUM, iShares' MSCI South Korea Capped ETF (EWY) is currently the most popular way for U.S. investors to get South Korean exposure through ETFs. It does not hedge against currency swings.
Sep. 23, 2013, 9:57 AM
- Extrapolating the Fed's more dovish stance to emerging markets, JPMorgan upgrades Turkey (TUR) and Peru (EPU) to overweight, where they'll join Mexico (EWM), Thailand (THD, TTF, TF), The Philippines (EPHE), and Taiwan (EWT).
- "Turkey feels like the tapering trade," says the team. "The suffering this summer turns to euphoria as the Fed returns to dovishness and retreats from tapering."
- Taiwan and Mexico rate an overweight because of their exposure to developed world growth, but what about Korea (EWY, FKO, KORU, KORZ)? Typically, the country belongs in this group, but JPMorgan is cautious on high-end tech and thus on Samsung. Taiwan, on the other hand, should benefit from the growth in low-priced smartphones.
- Moved to underweight are Russia (RSX, ERUS, RBL, RSXJ, RUDR) and Colombia (GXG, COLX, ICOL).
- Top 10 individual stock picks include ICICI Bank (IBN), Southern Copper (SCCO), and Cemex (CX).
Sep. 16, 2013, 7:14 AM
- Emerging markets power ahead to a 3-month high amid a global rally on the Summers withdrawal news. The MSCI Emerging Markets ETF (EEM) is up 1.1% premarket.
- Particularly notable moves include sharply lower Indonesian and Turkish bond yields, and the South Korean won strengthening to a 6-month high,
- Indonesia gained 3.4% overnight, Turkey +3%, and the Kospi rose 1%.
- The Hang Seng (EWH) jumped as well, +1.5%, though Shanghai closed moderately lower.
- Others: The Philippines and Thailand each gained 2.8%.
- Emerging market ETFs: AGEM, EEM, ADRE, SCHE, GMM, VWO, DEM, EWEM, PXH, PIE, EWX, DGS, EMLB, EDC, EET, EMSA, EDZ, EEV, EUM, TLTE, HILO, EELV, EEMA, EMFT, DVYE, FEMS, EVAL, EGRW, EMCR, IEMG, EMDR, EEME.
- Indonesia: EIDO, IDX, IDXJ.
- Turkey: TUR.
- South Korea: EWY, FKO, KORU, KORZ.
- The Philippines: EPHE.
- Thailand: THD, TTF, TF.
Sep. 10, 2013, 11:49 PM
- South Korea August unemployment: 3.1% versus 3.2% for July.
- The won retreats a bit after hitting a seven-month high at one point on Tuesday.
- Speculation regarding possible central bank intervention to stem the currency's rise may have the market spooked. "Traders are cautious about betting aggressively [around] the 1,080 level, because of the risk of intervention," one trader says.
- A stronger currency dents "the competitiveness of the nation’s exports, which contribute about 45% of GDP," Bloomberg notes.
- South Korea ETF: EWY
Aug. 30, 2013, 4:40 PM
Aug. 9, 2013, 5:17 PM
Jul. 25, 2013, 9:28 AMSouth Korean GDP unexpectedly jumped 1.1% in Q2 (4.5% annualized), the fastest Q2 pace in 2 years. On a Y/Y basis, GDP grew 2.3%, up from 1.5% in Q1. "The real test will be in Q3 when government support is expected to diminish," says an HSBC economist. The Kospi was off a hair. The South Korea ETF (EWY) +0.6% premarket (heavy weighting on Samsung). | Comment!
Jul. 10, 2013, 7:50 AMBargain-hunters turn to South Korea as the relative valuation of the MSCI Korea Index (EWY) drops to levels not seen since 2009 - it's trading at a 28% discount to the broader emerging markets index (EEM), which has been struggling itself. The country is famously export-dependent, making it vulnerable to "external shock" says one money manager, but others say stocks are already priced for that, and note the weakening won and a yen which has stopped falling. | Comment!
Jul. 5, 2013, 7:44 AMChina (FXI), Hong Kong (EWH), and India (EPI) are in a "high-risk danger zone" thanks to monetary policy that's been too loose for too long, according to a Nomura report showing skying debt levels across nearly all of Asia. Countries in the middle-risk range are South Korea (EWY), Malaysia (EWM), Singapore (EWS), and Thailand (THD). Meanwhile, Kyle Bass returns from a trip to Japan to talk about the coming collapse in China. He's "dramatically reduc(ing) risk in the portfolio." | Comment!
EWY vs. ETF Alternatives
The iShares MSCI South Korea Capped Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Korea 25/50 Index (the “Underlying Index”).
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