World Economic Research Institute invites Tai Hui, JP Morgan Chief Strategist Webinar
There is a possibility that the won/dollar exchange rate will rise to 1,500 won within this year, but analysis suggests that the possibility of a repeat of the Asian financial crisis is small.
Tai Hui, chief strategist at JP Morgan Asset Management, said this at the webinar ‘Crisis Diagnosis of Global Financial Markets: Checking the Risk of a Repeat Asian Currency Crisis Amid the Strong Dollar’ held by the World Economic Research Institute on the morning of the day. the 6th
Hui, chief strategist, said, “There is a legitimate possibility that the won/dollar exchange rate will break through 1,500 won within this year.” Given the interest rate gap due to the increase in high intensity interest rates in the country and the preference for safe assets amid concerns about a global economic slowdown, the earnings weakness could continue for the time being.”
He pointed out that the possibility of economic downturns in major countries such as the US, Europe and the UK could also be a burden for export-oriented countries such as Korea.
However, the fact that Korea’s current account is still in surplus, its dollar-denominated external debt is at a stable level, and the market trusts the Korean government and the Bank of Korea in its policy management support of the value of the win
The market consensus is that the won/dollar exchange rate will fall to a level of 1,400 won within three months and 1,320 won within 12 months rather than rising further, he said.
Hui, chief strategist, said of concerns about the recurrence of the Asian currency crisis, “It is true that the recent sharp decline in Asian currencies is a burden on companies and financial institutions in that country, but I do not believe that Asia will experience . a second currency crisis.”
In the past, the 1997-1998 International Monetary Fund (IMF) foreign exchange crisis was triggered by accumulated imbalances as Asian countries overused unsustainable policies such as artificially pegging their currencies to the US dollar. It is explained that the associated risks have been managed’ good to avoid this.
Specifically, he said, “Since it appears that the foreign exchange authorities are already taking various active market stabilization measures, such as purchasing forward exchanges directly from exporters using the foreign exchange balance fund, there is no need to use the Korea-U.S. exchange money at the moment,” he said
However, it was evaluated that the currency exchange agreement itself was still an effective countermeasure in terms of strengthening trust in the general assets gained.
Regarding the relatively large decline in the Korean stock market compared to major countries, Hui said, “The Korean stock market is characterized by high-tech stocks, which account for nearly half of the share of high-tech stocks in rather than the decline of the high-tech stocks. real economy. It reflects the risk of a slowdown in demand and the potential for a decline in corporate performance as a result.”
He stressed that although Korean stocks are “very cheap” in terms of valuation, for a rebound, the demand for investment in electronics facilities and global companies must first be confirmed.
He also said that at a time when there is still instability in the financial market, corporate bonds and defensive stocks of companies that can hold relatively firm even in a period of low growth may be the most desirable investment destinations.
/happy news
