Скачать или смотреть If Brexit becomes reality, Korea could see massive capital outflows

브렉시트 국민투표 결과가 한국경제에 미치는 영향은?
And of course investors around the world are keeping a close eye on the referendum.
Korea being no exception.
For more on how the decision could affect the Korean economy we turn to Hwang Ji-hye
If Britain decides to leave the EU,... analysts forecast a massive capital outflow from Korea,... which does not hold a key currency... and is seen more as an emerging economy,... especially when events of global financial uncertainty arise.
They say a Brexit would trigger a flight to safe assets like the U.S. dollar, the Japanese yen or gold.

"There's about 31 billion dollars worth of British investment in Korea's stock market, so if we see a Brexit, a huge chunk of that capital will flow back out to the UK."

That 31 billion... represents nearly 10 percent of all the foreign capital in Korea's securities market... and is the second largest overall.
We've already seen how local shares might react to a possible Brexit,... with Korea's benchmark Kospi dropping for six straight days from the 9th to the 16th.
The index... erased some 40 billion dollars in market cap.
From a trading perspective, however, the impact is likely to be limited.
Korea's exports to the UK take up a mere one-and-a-half percent of all outbound shipments.
If the "leave" side wins, Britain will have a two-year negotiation period with the EU about the terms of its departure.
Experts say... the transition would act as a grace period for Korea,... which would have to set new terms with the UK, because the free trade deal with the EU would no longer be valid.
What is crucial, though, is for Korea to cement a new deal within that period.

"If Korea fails to secure a new free trade deal with the UK before the two-year negotiation period, there's the possibility of Korea's products losing price competitiveness because of import duties."

Experts add that concluding those talks within the two years will not be an easy task.
Considering that Brexit is ultimately an event that's expected to damage global economic confidence and investment, they say it would further hurt Korean exports, which have been plunging for around a year-and-a-half now.
Hwang Ji-hye, Arirang News.


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