Concerns over Coronavirus Outbreak and its economic impact intensifies in Korea

 Korea is trying its best to contain the novel coronavirus (officially declared as COVID-19 by the WHO).  In the opening remarks of the 7th Cabinet Meeting, President Moon Jae-in highlighted  the importance of preemptive and extraordinary measures for both public safety and people’s livelihoods. In the meeting it has been shared that Korean people have the power to revive this medical emergency because Korea has world-class quarantine and medical systems. If Korean people will follow personal hygiene guidelines , believe in the Government’s rejoinders, continue normal economic activities in daily lives, economy can be rapidly recovered, the president added in the meeting.  

 On the economic front, interruption to South Korean manufactures were initially considered as temporary but delay in production has affected seriously due to the increased numbers of virus suspected and confirmed cases in South Korea. Delay in production have raised concerns over expected supply chains and consumption of the consumers. Consumer survey for Bank of Korea for the month of February 2020 showed that the Composite Consumer Sentiment Index(CCSI) STOOD 96.9 which is 7.3 points lower than that of January.

 In the survey, consumer sentiment concerning current domestic economic conditions was also found 12 points lower than in January, at 66, and that concerning future domestic economic conditions was 11 points down, at 76. It is noteworthy that Experts cautioned about the economic impact from the virus because of the quarantine measures kept two areas of Korea heavily affected with people staying home and major events cancelled/delayed.

                                               [Image source: CNBC]

 The Korean government and the people have sent a number of supplies and funds to evacuees from Wuhan, China. It should be noted that Wuhan city has been the epicenter of Corona outbreak. The local city governments are also engaged in distributing hand sanitizers, masks and donations. Evacuees in Korea who completed their two weeks of quarantine left placards expressing their thankfulness while leaving the quarantine facilities. However, South Korean president Moon Jae-in has emphasized on considering emergency steps to  tackle the situation as growing crisis from this deadly virus can bring an economic crisis  because of the China reliant Korean economy. Experts have already  alarmed that Coronavirus is going to bring slowdown of China’s growth which would further affect its neighbors too.

[Source: Cheong wa dae briefing/Bank of Korea] 

Korea to develop financial data exchange ecosystem

Korean government is set to run a financial data exchange platform this year in march. In order to accelerate the financial industry’s digital transformation, the financial services commission(FSC) of Korea will set up a financial security institute that will provide innovation data exchange solutions while ensuring the security and safety of data transactions. Data convergence management, evaluation of pseudonymised information , safety and security in data exchange will be major goals of this  specialized agency. Financial industry is one of the sectors where the use of big data is most active because of the high linkages to other sectors and accuracy of data. Last year in June, the FSC announced its plan to establish financial big data infrastructure tofacilitate the use of big data in the financial sector. 

                                          [Image source: google.com]

Further to this development, revision of Credit Information Use and Protection act was passed recently in January 2020 by the National Assembly of Korea which is expected to expand the level of supply and demand in data marketplace and promote safety and security in data distribution. In the press release published on Jan 21, the FSC has confirmed the establishment of a public-private joint council led by the FSC and composed of financial institutions and fintech firms. This public-private joint council is to operate working groups of supply &demand , guidelines to establish standards on procedures data excanhge and the policy support in data exchange.

Data industry experts are seeing this move as major facilitator that would provide an appropriate standard for the pricing of data.

[Source: Press Release of Financial Services Commission on Jan. 21

http://meng.fsc.go.kr/]

CBRE Predictions on Korea’s Real Estate

South Korea’s real estate market continue expectant. According to a recent summary report named Real Estate Market Outlook 2020:Korea published by the CBRE, a leading US-based commercial real estate service provider,  public investment in the real estate market is poised to grow despite the record low interest rates and global economic instability. 

 The report further discerns that because the ministry of land, infrastructure and Transport anticipates an increment in the public investments from 3.7% in 2019 to 10% in 2021. It is noteworthy that the Domestic real estate investment trusts (REITs) are looking for an initial public offering (IPO) in the Korea’s stock market and drawing attention of in the market.

 In the later half of 2019, Lotte REIT and NongHyup REIT had decided to go public and following their footsteps, IGIS which is Korea;s largest real estate related assets operator is also planning to list its REIT fund this year.

[Source:  cbrekorea.com/koreatimes.co.kr]