24/7 Wall St. » KF

Korean Credit Ratings Safe After Kim Jong-Il Death (EWY, SKOR, KF, KEF, PKX, KEP, SKM)

Administrator — Thu, 22 Dec 2011 14:33:01 +0000

If there was one issue which may have created uncertainty around the credit ratings of South Korea, it was the death of dictator Kim Jong-Il in North Korea. We just recently featured South Korea as a nation which could actually face a ratings upgrade, and the good news is that this has not changed.

While already investment grade, both S&P and Moody’s have chimed in saying that Jong-Il’s death changes nothing to the nation. It was Fitch which could still upgrade South Korea because its “A+” rating now has a “Positive” outlook. Fitch also joined S&P and Moody’s to note that the death poses no downgrade or outlook change.

This is likely all welcomed news for holders of the iShares MSCI South Korea Index (NYSE: EWY) and IQ South Korea Small Cap ETF (NYSE: SKOR) in ETFs and then also for the closed-end fund holders of The Korea Fund Inc. (NYSE: KF) and the Korea Equity Fund Inc. (NYSE: KEF).

It is unlikely that the businesses were truly that worries in South Korea, but the active ADR shares are POSCO (NYSE: PKX) as the Korean steel giant, Korea Electric Power Corp. (NYSE: KEP) as the utility, and SK Telecom Co. Ltd. (NYSE: SKM) in telecom.

When we looked at the research for the nations which could see credit rating upgrades the 2010 purchasing power parity GDP was $1.46 trillion. The big issue for investors to consider is that Fitch is only one of three ratings agencies with a “Positive” outlook. On the other hand, bargain hunters will notice that South Korean equity prices fell nearly 30% from the yearly highs in 2011.

JON C. OGG

Filed under: ADR, Bonds, ETF, International Markets Tagged: EWY, KEF, KEP, KF, PKX, SKM, SKOR

Eight Countries With Credit Ratings Set to Rise Next Year

Administrator — Wed, 21 Dec 2011 17:14:50 +0000

It seems that all of the nations around the world are facing sovereign credit ratings downgrades or warnings of downgrades. After the United States lost its prized “AAA” rating, the threat of downgrades hangs over all of Europe. Before assuming that the whole financial system is going down the drain with Europe, it is important to realize that some key developing nations are still growing strongly and have better credit metrics. More than 15 nations may even see one or more of the top three ratings agencies upgrade their sovereign credit ratings.

24/7 Wall St. has focused on the ratings with a “positive” outlook from Standard & Poor’s, Moody’s and/or Fitch with a bias towards nations that investors can easily invest in via ADR shares, closed-end funds, and exchange-traded funds (ETFs). The featured nations that may be upgraded in 2012 are Brazil, Chile, China (with Hong Kong), Indonesia, Peru, Russia, South Korea, and Turkey.

Read: Nations Set For Credit Ratings Beyond Upgrades, Beyond The Euro Crisis

There is another slew of countries for which S&P has a “positive” outlook stance: Azerbaijan, Bolivia, Ecuador, Honduras, Latvia, Panama, and Sri Lanka. Unfortunately, these nations are almost impossible for Americans to invest in due to their size, the small number of public companies, and a lack of ETFs or mutual funds covering them.

The 24/7 Wall St. list is presented alphabetically and features relevant ratings. Also included are economic details and important developments to consider. Lastly, we have provided a list of the key closed-end funds, ETFs, and ADRs specific to each nation. Population estimates and purchasing power parity GDP for 2010 were taken from the CIA World Factbook.

Filed under: ADR, Austerity, Banking, Bonds, China, Commodities, Currency, Economy, Editor's Picks, Emerging Markets, ETF, International Markets, Labor & Unions Tagged: BAP, BBD, BCH, BRF, BRFS, BVN, BZF, CEE, CH, CHN, CZZ, ECH, EIDO, EPU, ERJ, ERUS, EWH, EWY, EWZ, FXI, GOL, GXC, IDX, IF, KEF, KEP, KF, LFL, MBT, MTL, PBR, PEK, PKX, RBL, RSX, RSXJ, SAN, SCCO, SKM, SKOR, SQM, TDF, TKC, TKF, TLK, TRF, TUR, VALE, VIP

Kim Jong-il Death Drives Uncertain Korean Trading (EWY, KF, KEF, SKOR, PKX, KEP, SKM, ATK, RTN)

Administrator — Mon, 19 Dec 2011 14:53:22 +0000

If there is one of several regions which can erupt rapidly, it is around the Korean Peninsula. The death of Kim Jong-il (that photo is a tribute photo for him) after a heart attack has caused more market uncertainty for the South Korean market and the fear is that the North Korean leadership could face a power struggle. The news is taking a toll on the ETFs, Funds, and ADRs which trade based in America as well.

iShares MSCI South Korea Index (NYSE: EWY) tracks the performance of publicly traded securities in the South Korean markets inside the MSCI South Korea Index and its shares are down 3.75% at $49.80 against a 52-week range of $40.65 to $69.99.

There are also two more fund vehicles via and ETF called The Korea Fund Inc. (NYSE: KF), down 2.4% at $39.54, and the closed-end fund called the Korea Equity Fund Inc. (NYSE: KEF) which is down 2,2% at $8.78. Both generally have very light trading volume. A much smaller and often illiquid play is the IQ South Korea Small Cap ETF (NYSE: SKOR) and its shares are down 5% at $25.59 against a 52-week range of $22.90 to $35.68.

There are three active and large ADRs from South Korea that we track which have NYSE share listings: POSCO (NYSE: PKX), the Korean steel giant, is down 2.9% at $81.47 and the 52-week range is $70.47 to $118.00; Korea Electric Power Corp. (NYSE: KEP) is down 2.3% at $11.28 and its 52-week range is $8.22 to $15.25; and finally SK Telecom Co. Ltd. (NYSE: SKM) is down 2.25% at $13.82 against a 52-week range of $13.35 to $20.29.

Trying to make any bold prediction about what leadership will rise and what policies will come ahead would be like asking a gunslinger to lead a charity fundraiser for children. Of the defense sector, Alliant Techsystems Inc. (NYSE: ATK) is a top ammunition maker and its shares are up 1% at $55.99 and rocket-maker and missile-maker Raytheon Co. (NYSE: RTN) is up 1.2% at $46.07. Any coincidence?

JON C. OGG

Filed under: ADR, Defense, Emerging Markets, ETF, International Markets, Politics Tagged: ATK, EWY, KEF, KEP, KF, PKX, RTN, SKM, SKOR

South Korea’s Rate Hike Surprise Versus U.K. & E.U. (EWY, KF, KEF, PKX, KEP, SKM, SKOR)

Administrator — Thu, 13 Jan 2011 13:07:41 +0000

The news was expected to be setting up for headlines such as “No rate hikes from the Bank of England nor from the European Central Bank” this morning. South Korea changed that news flow. The Bank of Korea decided to surprise markets with an early rate hike for 2011 due to its stance that it needs to cap inflationary pressures. The move resembles recent actions taken out by the Bank of China as it aims to keep a lid on inflationary pressures and to keep its economy from overheating.

The Bank of Korea’s hike was only by 0.25% and some had felt that a surprise move was coming. If it is a surprise move, then how does everyone know? Many were expecting the move in February apparently. The policy from the central bank is that inflationary pressures remain and it wants to get ahead of further inflationary pressure as commodity prices remain very high and as the world economies continue their recovery path in 2011.

In ETF-land there is iShares MSCI South Korea Index (NYSE: EWY), The Korea Fund Inc. (NYSE: KF), and the Korea Equity Fund Inc. (NYSE: KEF). A much smaller play that is often very illiquid is the IQ South Korea Small Cap ETF (NYSE: SKOR),

Investors in America may watch the three active ADRs of POSCO (NYSE: PKX), the Korean steel giant; and there is also Korea Electric Power Corp. (NYSE: KEP) and SK Telecom Co. Ltd. (NYSE: SKM) is down 2.5% at $17.94.

JON C. OGG

Filed under: ADR, Bonds, Economy, International Markets Tagged: EWY, KEF, KEP, KF, PKX, SKM, SKOR

Korean-American ADR/ETFs React Sharply on New Military Skirmish (EWY, KF, KEF, PKX, KEP, SKM, ATK, RTN, LMT, SKOR)

Administrator — Tue, 23 Nov 2010 15:30:47 +0000

War and the fear of war create uncertainty for financial markets. If there is one place in the world that you can count on uncertainty rising from throughout the years it is North Korea and South Korea. A new round of cross-border military engagement between troops in North Korea and South Korea has created a wave of uncertainty that pressured stocks and rallied bonds well beyond Asia. What is interesting is that the defense (or war) stocks are not seeing a major interest so far after this new incident.

iShares MSCI South Korea Index (NYSE: EWY) aims to track the performance of publicly traded securities in the South Korean markets inside the MSCI South Korea Index. The ETF’s shares are down 5.24% at $53.61. There are also two more fund vehicles via and ETF called The Korea Fund Inc. (NYSE: KF) and the closed-end fund called the Korea Equity Fund Inc. (NYSE: KEF). The Korea Fund Inc. (NYSE: KF) is down 5% at $40.66 and the closed-end fund called the Korea Equity Fund Inc. (NYSE: KEF) is down 4.8% at $11.28 but both generally have very light trading volume.

There are three active and large ADRs from South Korea that we track which have NYSE share listings: POSCO (NYSE: PKX), the Korean steel giant, is down 4.8% at $96.20; Korea Electric Power Corp. (NYSE: KEP) is down 5.5% at $12.12; and SK Telecom Co. Ltd. (NYSE: SKM) is down 2.5% at $17.94.

We are not going to make a gunslinger’s prediction from half way around the world over how this latest round of military action will play out, even if there are reports of civilian death. What we would note is that if the military conflict was expected to rapidly escalate into something far worse you might expect to see a rally taking place in the defense stocks. So what if the defense or war stocks are not moving? Alliant Techsystems Inc. (NYSE: ATK), the largest bullet maker, is down 0.1% at $73.53 on light trading. Raytheon Co. (NYSE: RTN), the maker of patriot missiles, is down 0.2% at $46.43. Lockheed Martin Corporation (NYSE: LMT) makes fighter jets, missiles, combat systems, and many more tools for fighting war and tracking enemies; its shares are down 0.1% at $68.57.

A much smaller play that is often very illiquid is the IQ South Korea Small Cap ETF (NYSE: SKOR) and its shares are down 6.1% at $26.90 on very very thin trading volume.

JON C. OGG

Filed under: ADR, Defense, Emerging Markets, ETF, International Markets, Mutual Funds, Trading Alert Tagged: ATK, EWY, KEF, KEP, KF, LMT, PKX, RTN, SKM, SKOR

52-Week Low Club (AXP, COF, NILE, CLX, RDEN, FDX, HOG, ISRG, KF, MSCC, PII, RAX, RNWK, STX)

247wallst — Fri, 23 Jan 2009 16:14:27 +0000

Today’s market looked more like an advanced yo-yo session rather than a regular stock market trading day. Since stocks gapped down so much, there were many new names on the list of 52-week lows. What is interesting is that many other stocks hit 52-week lows but bounced back to being positive on the day.

American Express (NYSE: AXP) and Capital One (NYSE: COF) both graced the list of lows as GE’s consumer losses only added fuel to the fire.
Blue Nile Inc. (NASDAQ: NILE) tankola, again. Forget Valentine’s Day this year.
Clorox Co. (NYSE: CLX) burns investors’ eyes as bad as it burns its client’s eyes.
Elizabeth Arden (NASDAQ: RDEN) keeps falling after the bad news from it and its peers over the last week and a half. Brittney Spears can’t help.
FedEx Corp. (NYSE: FDX) keeps dropping.
Harley Davidson (NYSE: HOG) caught another case of HAGS and is believed to be in trouble all year after earnings.
Intuitive Surgical (NASDAQ: ISRG) keeps getting pounded. Down close to 70% from highs now. Leonardo DaVinci would now sue over the use of his name.
The Korea Fund (NYSE: KF) was down almost 7%. We don’t like to put country funds or ETF’s today, but that Kim Chee from last night just didn’t sit well today.
Microsemi (NASDAQ: MSCC) on earnings warning.
Polaris Industries (NYSE: PII)… weak HOG sales from Harley, weak motorcycle and snowmobile relative? Works every time.
Rackspace Hosting (NYSE: RAX)… Racking the Rackers, in the server room….
RealNetworks (NASDAQ: RNWK), a surprise but think of peers. And when was the last time you bought anything from them?
Seagate Technology (NYSE: STX) again… with the earnings it put up this week, you can call it Floodgate.

Jon C. Ogg
January 23, 2009

Posted in HI/LOW, Trading Alert Tagged: AXP, CLX, COF, FDX, HOG, ISRG, KF, MSCC, NILE, PII, RAX, RDEN, RNWK, STX