This document provides an economic analysis and overview of South Korea. It notes that the country's GDP growth rate is 0.7% and unemployment rate is 3.7%. Recent political news discusses the large protests calling for the resignation of President Park Geun-Hye due to a corruption scandal. The stock market indexes declined in late September due to issues surrounding Samsung's Galaxy Note 7 phone catching fire. The analysis also discusses potential impacts of Donald Trump's election on the US-South Korea trade relationship.

1. Asia
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Main indicators
GDP Growth rate : 0.7%
Unemployment rate : 3.7%
Infla5on rate : 1.3%
Interest rate : 1.25%
Balance of trade : 7187 USD Million
Government Debt to
GDP :
35.12%
% of change KRW/USD : 0.309%
% of change CNY/KRW : -0.308%
Interbank rate : 1.48%
CPI 111 Index-Points
hHp://contact02658.wix.com/cercleinves5ssement
Analyst – Amélie CLEMENT-LAMIRAULT
South Korea Analysis
11/23/16
Cercle d’invesJssement de l’IESEG School of Management
Macroeconomic
Analyst
News :
PoliJc : One million of Korean ci5zen marched on the 12th of November in order to ask the resigna5on of the Park
Geun-Hye, Presidente of South Korea. The South Korean Presidente is held responsible of corrup5on. Choi-Soon-Sil, a
closest friend of the Presidente, would have used her rela5onship with Park Geun-Hye to embezzle money from
Chaebols. On the 19th of November, there was an other protest march with half a million people in Seoul.
EducaJon : On the 17th of November, the South Korean world woke up later. In fact, college student passed their
exams to enter in the University. These exams led to open private firms and even the South Korean stock exchange at
10 o’clock. Each year, these exams revive the debate about the effec5veness of theses measures. Although students get
the best marks in the interna5onal rankings, the level of depression and suicide is also very high.
US elecJon : During his elec5on campaign Trump declared unfair the free movement of goods between South Korea
and United States of America. Furthermore, South Korea is afraid to open is legal service to american law office. All this
decisions are going to be negociated between Donald Trump and Park Geun-Hye.
Graph 1 : GDP in US dollar
85%
90%
95%
100%
105%
23/11/2015 23/04/2016 23/09/2016
KRW/EUR KRW/USD
Graph 2 : Currencies
Announcement of the last 2 weeks
Last Forecast Previous
November 8th 2016
Unemployment rate 3.7% 3.8% 4%
November 11th 2016
Interest Rate Decision 1.25% 1.25% 1.25%
November 13th 2016
Export Prices YoY -1.6% -7.6% -8.3%
Import Prices YoY -0.6% -6.5% -7.7%
November 17th 2016
PPI YoY -0.2% -0.1% -1.1%
PPI MoM 0.2% 0.3% 0.2%
Source : Trading Economics
Source : Bloomberg Source : Bloomberg
Source : Trading Economics
98%
99%
100%
101%
102%
103%
01/01/2016 01/04/2016 01/07/2016
GDP South Korea GDP USA
Source : Le Monde

2. Les informa,ons et analyses diffusées par Le Cercle d'Inves,ssement de l'IESEG ne cons,tuent qu'une aide à la décision pour
les inves,sseurs. La responsabilité du Cercle d'Inves,ssement de l'IESEG ne peut être retenue directement ou indirectement
suite à l'u,lisa,on des informa,ons et analyses par les lecteurs. Il est recommandé à toute personne non aver,e de
consulter un conseiller professionnel avant tout inves,ssement. Ces informa,ons indica,ves ne cons,tuent en aucune
manière une incita,on à une quelconque opéra,on boursière. Cercle d’invesJssement de l’IESEG School of Management
Asia
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Analyst – Amélie CLEMENT-LAMIRAULT
SOUTH KOREA ANALYSIS
11/23/16
Macroeconomic
Analyst
Stock Market
KRX 100 3929.66 KRW
KTOP 30 6325.61 KRW
80
84
88
92
96
100
104
108
112
23/11/2015 23/04/2016 23/09/2016
KRX100 Index (in %)
KTOP30 Index (in %)
Varia5on in 100 base demonstrate a
significant drop at the end of September on
both Index. This decrease can be explained by
the Samsung scandal. In fact, all Galaxy Note
7 were called back
Bond Market
2-Year Government Bond +2.1%
5-Year Government Bond +6.7%
20-Year Government Bond +9.5%
For the first 5me the country is going to
invest in very long maturity bond (50Y) in
order to solve the issue of ageing popula5on.
The drop in the 20Y bond might be due to the
corrup5on maHer.
Announcement to follow the next 2 weeks
Last Forecast
November 24th 2016
Consumer Confidence 101.9 100
November 29th 2016
Industrial Produc5on YoY -2%
Retail Sales YoY 0.5%
Manufacturing Produc5on YoY -2.2%
December 1st 2016
Balance of Trade $7.2B $10.9B
GDP Growth Rate YoY Final 3.3% 2.8%
Nikkei Manufacturing PMI 48
December 2nd 2016
Foreign Exchange Reserves $375.17B
Source : Bloomberg
Source : Bloomberg
Source : Trading Economics
95
96
97
98
99
100
101
102
9/1/16 10/1/16
5Y Bond 2Y Bond 20Y Bond
Source : Bloomberg
Is the Trump policy going to affect the South Korean economy ? Is he
going to have a policy of coali5on or a policy against the current
agreement such as the free movement ? All these ques5ons are going to
be answered in the next few weeks.
This is a bad year for Samsung. Firstly, the company was among the
firms affected by the corrup5on scandal with Mrs Choi. Secondly, the
lauch of the “Samsung Galaxy Note 7” was brought to a halt due to
burning troubles. In October the market capitaliza5on decreased from
1.703 to 1.553 within 5 days.
Samsung scandal