Willie
>> INTC is a great buy while the market is overly negative and before it rebound in February next year.
I agree; the question is the timing and price. Korea and a market meltdown is not over yet; NKorea may? dafault on loans? or, threat off? Here is the latest from Dow Jones: ( 2 articles).
USINESS 12/16/97
Revival Of Confidence In South Korea Sparks Market Rally
SEOUL -(Dow Jones)- South Korea's decision to allow the won to float freely
revived paper-thin confidence in the country's financial markets Tuesday, but
analysts warned problems may soon resurface.
On the first day of the free float, the won rallied 10% to 1,425 won per
dollar, compared with 1,563.90 won per dollar at Monday's close amid the
perception the government is finally resolved to taking bold steps to revive
the economy. Share prices soared along with the currency, with the key index
South Korea Composite Stock Price index closing up 18.46 points, or nearly
5%, at 404.26.
The won lost 27% of its value last week, and at its worst point was down
51% from the beginning of the year.
Confidence was boosted late Monday when the South Korean government
abandoned its currency regime, in which the won could rise or fall no more
than 10% from the previous day's average value against the dollar.
The finance ministry said the decision was prompted by the country's
improving international balance of payments and on expectations of strong
capital inflows, after last week's steps to give foreigners greater access to
securities markets. U.S. officials had said the system was counterproductive
because it prevented the won from finding a bottom where speculators and
others would begin to buy the currency.
Confidence was further boosted early Tuesday after the government said it
would raise its ceiling on interest rates to make investments in won-based
instruments more attractive. A government official said the ceiling on
interest rates would be raised to 40% from 25% at present; Korean rates
nearly hit the 25% limit last week, curbing the government's ability to
affect financial markets.
Another key factor improving sentiment is this week's presidential
election. The administration of President Kim Young Sam has been hamstrung by
the coming change of power, and analysts and bankers are hoping that the
election will bring a clear direction to future economic policy.
Although the markets embraced the government's steps, analysts warned that
the troubles that led the country to request a record $57 billion bailout
from the International Monetary Fund haven't disappeared.
They said South Korea still faces a huge burden in meeting its short-term
debt obligations, which total around $100 billion, with an estimated $16
billion to 17 billion due by the year end.
"There's still a fear South Korea may not be able to meet its external
obligations," said an analyst at a foreign brokerage house in Seoul. "Where
the country will come up with money when the IMF hasn't promised to
accelerate its delivery of funds and neither has the World Bank nor IMF, I
don't know."
The IMF has disbursed $5.6 billion to Korea so far and will likely be
offering another $3.6 billion on Dec. 18, the date of presidential elections.
A further $2 billion is scheduled for disbursement upon a review of Korea's
compliance with the IMF program Jan. 8.
Meanwhile, although the Asian Development Bank stands by its commitment to
lend $4.051 billion to South Korea under the auspices of the IMF, the bank
denied statements from a South Korean government official that it has agreed
to expedite its delivery of funds.
"The entire proposal of ADB assistance for Korea as part of the bailout
program hasn't been finally approved by the board," said Karti Sandilya,
assistant chief information officer of the ADB. "There has been no decision
to deliver within the year an initial amount to South Korea."
Meanwhile, the government Monday said it is considering raising $10 billion
overseas by issuing bonds. But the plan could face problems, since a $2
billion bond issue by the government-owned Korea Development Bank had to be
postponed last week because of investor worries over the country's
deteriorating economy.
Dow Jones.
*****************************************
Desperate for Advice,
South Koreans Look
To the Gloved One
---
Michael Jackson, King of Pop,
Plays the King of Seoul
As Soros Plays the Heavy
----
By Steve Glain
12/16/97
The Wall Street Journal
SEOUL, South Korea -- In just eight weeks, South Korea has gone from
being one of the world's most powerful industrial economies to one of
its more desperate charity cases. So, a leading presidential contender
figured, it was time to gather two very wealthy people in a video
conference to offer advice and support.
The guest panelists: George Soros, lord of the hedge fund, and
Michael Jackson, king of the moon walk. The two were beamed live to
Seoul via satellite, as were former U.S. trade envoy Mickey Kantor and a
representative of a Saudi prince.
In the surreal shadow of Korea's financial crisis, the playbill of
Messrs. Soros and Jackson, icons of American financial and cultural
hegemony, was enough to give candidate Kim Dae Jung the edge in this
campaign's weirdness stakes, at least for a brief period.
This is, after all, an election where the No. 3 candidate's defining
impression is his physical resemblance to a dead dictator (Park Chung
Hee, who presided over this country's rapid industrialization from 1961
to 1979). Meanwhile, Mr. Kim's closest rival, Lee Hoi Chang, was hit
with allegations that his son ducked military service by lying about his
height. (Doctors recently measured the son on national television, found
him too short for national service, and Mr. Lee has since staged a
comeback.)
But for pure star appeal, Mr. Kim's teleconference was hard to beat.
The meeting was the inspiration of Kim allies You Jeung Keun, a
provincial governor, and Kenneth Choi, a California-based associate of
Mr. Jackson's family. With Korea's economy in a free fall, the two men
wanted to put together a meeting of distinguished minds that might help
generate ideas to pull the country out of its doldrums.
The conference, held early Friday morning, couldn't have been timed
better for Mr. Kim. He was being hounded by Michel Camdessus, head of
the International Monetary Fund, for wavering in his support for a $57
billion emergency bailout fund to prevent Korea from going bankrupt.
(Mr. Kim had suggested that the IMF's terms were too harsh and should be
renegotiated.)
Mr. Kim's aides persuaded him to use the conference as a platform to
throw his support behind the IMF bailout. The candidate invited about 20
broadcast and print journalists, most of them Korean.
First on the screen was Mr. Soros, live from New York. He has been
accused by some Asian leaders of conspiring to sabotage the region's
currencies through wanton speculation-an allegation he firmly denies.
But Mr. Kim welcomed Mr. Soros as a sage. "My country faces a grave
economic crisis," said the candidate to the larger-than-life video image
of Mr. Soros. "We badly need outside help."
Mr. Soros was sincere but direct. "You must invite foreign companies
to come in and be direct investors and owners of Korean companies," he
said. "And companies that can't meet their obligations must be allowed
to go bankrupt."
Mr. Kantor, a veteran of numerous public spats with mercantilist
Korea, came next. His image, broadcast from Washington, was met by
hisses from several reporters. Aware of Korea's election on Thursday,
Mr. Kantor prefaced his remarks by cautioning participants "that our
part in this informal discussion . . . should not be used in any way as
an influence on the election." He advised Koreans to look at Mexico as a
model for economic recovery.
Then came the main event. A woman's off-camera voice announced that
Mr. Jackson was ready to speak from New York, and a murmur fanned
through the crowd. Suddenly, on the screen appeared Mr. Jackson in black
fedora, black sunglasses and black frock. (He wasn't wearing his
trademark white glove.)
Mr. Jackson, who several years ago was briefly banned from performing
by Korean officials who condemned his antics and lyrics, read dreamily
from a prepared text. "Although Korea is currently undergoing economic
difficulties," he said, "I truly believe in my heart that Korea is a
country of warmth, love, sincerity and complete innocence." He then
disclosed plans to hold a charity concert for starving children in North
Korea.
Mr. Jackson may someday have a more direct interest in South Korea's
recovery. He has been in negotiations to buy a huge winter-sports resort
from its owner, a South Korean underwear manufacturer. He also was
pictured last month hugging Mr. Kim, and he praised the candidate for
his efforts to promote democracy. (Mr. Jackson's agent declined to
comment.)
As for Mr. Kantor, who now works as a trade lawyer and consultant in
Washington, he says his agent booked the gig. He wouldn't say how much
he was paid, but initially thought it was a speech to a university
audience. Then he heard Michael Jackson was also going to be on the
teleconference. Mr. Kantor thought that was a reference to a talk-show
host by the same name. "When they said it was the entertainer, I said,
'Come on.' " But Mr. Kantor says he didn't stay hooked into the
conference long enough to hear the entertainer's remarks.
At the end of the teleconference, Mr. Kim thanked his guests for
their "kind and candid advice." He stressed his commitment to carrying
out measures proposed by the IMF, and to open markets in general.
The conference, parts of which were later televised, met with mixed
reviews. Byun Sung Hyuk, a student and Kim supporter, was impressed that
the candidate didn't need an interpreter for the English-language
session, demonstrating that he was "a competent diplomat." The meeting,
he says, showed that Mr. Kim was "committed to nurturing hightech
telecommunication systems."
But Chi Seung Hoon, a 29-year-old sales representative who opposes
Mr. Kim, dismissed it as "a publicity stunt" and a "tragedy for our
politics and our people." |
