Short comment
Even though regional macroeconomic situation does not look good, BOK raised the benchmark rate, 7days repo, by 25bp. In fact, interest rate markets didn't show huge reaction for the rise. Futures of 3 year and 10 year of Korean Government Bonds were showing huge fluctuations during market hours, but they ended at almost no change.
On the other hand, KOPSI200 went down by 1%. It means that the market participants are still in risk-aversion with slowing regional macroeconomic situation. They avoided the risk by going to interest rate market.
However, the rise of the rate doesn't mean that BOK will go into tightening period. Ju-yeol Lee, President of BOK, suggested that the rise will not give huge burden to the real economy. Mr. Lee ensured that the stance of BOK is easing. Like I keep insisting in my weekly comment, BOK does not want to decrease the liquidities among domestic institutional investors. With that, I believe that the regional stock market was overreacting to the rise at this Friday.
In short-term, KOPSI200 could go lower, but I still preserve opinion of that direction of KOSPI200 is Bullish, and will be 280 at the end of this year.
Even though regional macroeconomic situation does not look good, BOK raised the benchmark rate, 7days repo, by 25bp. In fact, interest rate markets didn't show huge reaction for the rise. Futures of 3 year and 10 year of Korean Government Bonds were showing huge fluctuations during market hours, but they ended at almost no change.
On the other hand, KOPSI200 went down by 1%. It means that the market participants are still in risk-aversion with slowing regional macroeconomic situation. They avoided the risk by going to interest rate market.
However, the rise of the rate doesn't mean that BOK will go into tightening period. Ju-yeol Lee, President of BOK, suggested that the rise will not give huge burden to the real economy. Mr. Lee ensured that the stance of BOK is easing. Like I keep insisting in my weekly comment, BOK does not want to decrease the liquidities among domestic institutional investors. With that, I believe that the regional stock market was overreacting to the rise at this Friday.
In short-term, KOPSI200 could go lower, but I still preserve opinion of that direction of KOSPI200 is Bullish, and will be 280 at the end of this year.
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