South Korea blames its financial woes on foreign investors

[cstaylor]

Korean Says Foreigners' Fears Are Hurting Stock Market

Korea's new finance minister, Kim Jin Pyo, said today that foreigners' misconceptions about tensions with North Korea were to blame for much of the South Korean stock market's shaky performance in recent weeks, and may be scaring investors away from the country.

"There is a big gap," he told a gathering of foreign journalists here today, "between what people here feel is happening in the nuclear standoff and what people abroad are hearing. Those who live here have faith and conviction that the nuclear issue will be resolved in a peaceful manner. We know accurately what the situation is like in North Korea."

[Big Booger]

Yeah, no worries about the impending nuttcase armed with nukes in the North.. hahaha

If I were an investor, and a loon like Kim Jong Il were running around launching rockets, rearming and reassembling weapons programs.. I would be hesitant to head to SK.. in fact I would do exactly as they are doing and tuck tail and get the hell out of SK.

[American Oyaji]

Looks like they are following in Japan's footsteps and have decided to play,
"Blame it on the GAIJIN".

[Jack]

The interpretation is true, however, the spin might be exagerated. That foreign investors are fleeing Korean equities is a fact. And it is true that local people tend to be more courageous than foreign investors. Foreigners can move their money out very quickly and have loyalty to any particular markets. Higher risk requires higher returns and if they don't see that in Korea, out goes the money.

We experienced the same in Canada during the Quebec referenda. When the polls heat up in favour of the "yes" vote, foreign money would pour out of Canada and the Canadian dollar. But Canadians kept faith and continued investing. At that time, Canadian politicians were blaming foreign investors for the weakening Canadian dollar.

[cstaylor]

Of course Quebec wasn't armed with nuclear weapons.... just clipboard-carrying language nazis making sure the French was twice the size of English on any public posts...

[Jack]

CS,

The logic is the same. Foreign investors move their money out as soon as there is increased perceived risk. So it is correct for a government to blame foreign investors for depressing financial assets because it is true.

[cstaylor]

But you have to admit that the risk is higher. North Korea might not attack the South, but I'm pretty sure we'll see some missiles flying over Japan sometime next month.