Country Briefing: South Korea Yardeni Research, Inc.

January 10, 2017

Dr. Edward Yardeni 516-972-7683 [email protected]

Debbie Johnson 480-664-1333 [email protected]

Please visit our sites at www.yardeni.com blog.yardeni.com

thinking outside the box

Table Of Contents

Table Of Contents

Real GDP Industrial Production Purchasing Managers Indexes Merchandise Trade Retail Sales Labor Market Consumer & Business Confidence Consumer Prices Interest Rates Stock Market Industrial Production & Exports Exports

January 10, 2017 / South Korea

1-2 3 4 5 6 7 8 9-11 12 13 14 15-16

Yardeni Research, Inc. www.yardeni.com

Real GDP Figure 1. 6 4

6

SOUTH KOREA: REAL GDP (quarterly percent change)

4

Total

2

2 Q3

0

0

-2

-2

-4

-4

-6

-6 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

6

6

Household Consumption

4

4

2

2 Q3

0

0

-2

-2

-4

-4

-6

-6 2000

2001

2002

2003

2004

2005

2006

2007

9

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 9

Gross Fixed Capital Formation (GFCF)

6

6

3

3

Q3

0

0

-3

-3

-6

-6 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

10

10

Construction (GFCF) 5

5 Q3

0

0

-5

-5

-10

yardeni.com 2000 2001 2002 2003 Source: Bank of Korea.

-10 2004

2005

Page 1 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Yardeni Research, Inc. www.yardeni.com

Real GDP Figure 2. 20 15

20

SOUTH KOREA: REAL GDP (quarterly percent change)

Machinery & Equipment (GFCF)

15

10

10

5

5 Q3

0

0

-5

-5

-10

-10

-15

-15 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

6

6

Government Spending

4

4

2

2

Q3

0

0

-2

-2 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

15

15

Exports of Goods & Services

10

10

5

5 Q3

0

0

-5

-5

-10

-10 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 20

20

Imports of Goods & Services

15

15 10

10 5

5

Q3

0

0

-5

-5

-10

-10

-15

-15 yardeni.com

-20 2000 2001 2002 2003 Source: Bank of Korea.

2004

2005

Page 2 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-20

2018

Yardeni Research, Inc. www.yardeni.com

Industrial Production Figure 3. 115

115

SOUTH KOREA: INDUSTRIAL PRODUCTION

Nov

(2010=100, sa) 105

105

95

95

85

85

75

75

65

65

55

55

yardeni.com

45 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

45

2018

Source: National Statistics Office.

Figure 4. 40 35

40

SOUTH KOREA: INDUSTRIAL PRODUCTION (yearly percent change)

35

30

30

25

25

20

20

15

15

10

10 Nov

5

5

0

0

-5

-5

-10

-10

-15

-15

-20

-20

-25

-25

-30

-30 yardeni.com

-35 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-35

2018

Source: National Statistics Office.

Page 3 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Purchasing Managers Indexes Figure 5. 56

56

SOUTH KOREA: MANUFACTURING PMI*

54

54

52

52

50

50 Dec

48

48

46

46

yardeni.com

44 2011

2012

2013

2014

2015

2016

2017

44

2018

* An index above 50 indicates an increase in manufacturing activity. An index below 50 indicates a decrease in manufacturing activity. Soure: Haver Analytics.

Page 4 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Merchandise Trade Figure 6. 12

12

SOUTH KOREA: MERCHANDISE TRADE (billion dollars, sa)

9

9 Dec

Balance

6

6

3

3

0

0

-3

-3

-6

-6 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

55

55

50

50

45

45

Dec Exports

40

40

Imports

35

35

30

30

25

25

20

20

15

15

10

10

5

5 2000

60

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 60

(yearly percent change in 3-ma)

50

Exports

50

40

Imports

40

30

30

20

20

10

10

Dec

0

0

-10

-10

-20

-20

-30

-30

-40

-40 yardeni.com

-50 2000 2001 2002 2003 2004 Source: Korea Customs Service.

2005

Page 5 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-50

2018

Yardeni Research, Inc. www.yardeni.com

Retail Sales Figure 7. 125 120

125

SOUTH KOREA: RETAIL SALES

Nov

(2010=100, sa)

120

115

115

110

110

105

105

100

100

95

95

90

90

85

85

80

80

75

75

70

70 yardeni.com

65 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

65

2018

Source: National Statistics Office.

Figure 8. 25

25

SOUTH KOREA: RETAIL SALES (yearly percent change)

20

20

15

15

10

10

5

5 Nov

0

0

-5

-5

yardeni.com

-10 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-10

2018

Source: National Statistics Office.

Page 6 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Labor Market Figure 9. SOUTH KOREA: EMPLOYMENT 26

Dec

(millions, sa)

26

24

24

22

22

20

20 2000

1.3 1.2

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 1.3

SOUTH KOREA: UNEMPLOYMENT (millions, sa)

1.2

1.1

1.1

1.0

1.0 Dec

.9

.9

.8

.8

.7

.7

.6

.6 2000

5.5

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 5.5

SOUTH KOREA: UNEMPLOYMENT RATE (percent)

5.0

5.0

4.5

4.5

4.0

4.0

3.5

3.5

Dec

3.0

3.0 yardeni.com

2.5 2000 2001 2002 2003 2004 Source: National Statistics Office.

2005

Page 7 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2.5

2018

Yardeni Research, Inc. www.yardeni.com

Consumer & Business Confidence Figure 10. SOUTH KOREA: CONSUMER CONFIDENCE 120

(100=neutral, nsa)

120

110

110

100

100 Dec

90

90

80

80

yardeni.com

70 2009

2010

2011

2012

2013

2014

2015

2016

2017

70

2018

Source: Bank of Korea.

Figure 11. 100

100

SOUTH KOREA: BUSINESS CONFIDENCE (100=neutral, nsa)

90

90

80

80

Dec 70

70

60

60

yardeni.com

50 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

50

2018

Source: Bank of Korea.

Page 8 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Consumer Prices Figure 12. SOUTH KOREA: CONSUMER PRICE INDEX 6

(yearly percent change)

6

Total Excluding Agricultural Products & Oil

4

4

2

2 Dec

0

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

20

20

Food & Non-Alcoholic Beverages

15

15

10

10

5

5

Dec

0

0

-5

-5 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

7

7

6

6

Clothing & Footwear

5

5

4

4

3

3

2

2 Dec

1

1

0

0

-1

-1 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

8

Housing, Water, And Fuels

6

6

4

4

2

2

0

0 Dec

-2 -4

-2

yardeni.com 2000 2001 2002 2003 2004 Source: National Statistics Office.

-4 2005

Page 9 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Yardeni Research, Inc. www.yardeni.com

Consumer Prices Figure 13. 10

10

SOUTH KOREA: CONSUMER PRICE INDEX (yearly percent change)

Household Furnishings & Maintenance

5

5

Dec

0

0

-5

-5 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

20

20

15

15

10

10

Health 5

5 Dec

0

0

-5

-5 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

20

20

Transportation

10

10 Dec

0

0

-10

-10

-20

-20 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

6

6

3

3

Communication

Dec

0

0

-3

-3

-6

-6 yardeni.com

-9 2000 2001 2002 2003 2004 Source: National Statistics Office.

2005

Page 10 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-9

2018

Yardeni Research, Inc. www.yardeni.com

Consumer Prices Figure 14. 6 4

6

SOUTH KOREA: CONSUMER PRICE INDEX (yearly percent change)

4

Culture & Recreation 2

2

Dec

0

0

-2

-2

-4

-4 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

8

Education 6

6

4

4

2

2

Dec

0

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

8

8

6

6

Restaurants & Hotels 4

4 Dec

2

2

0

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

12 8

12

Miscellaneous Goods & Services

8

4

4

Dec

0

0

-4

-4 yardeni.com

-8 2000 2001 2002 2003 2004 Source: National Statistics Office.

2005

Page 11 / January 10, 2017 / South Korea

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-8

2018

Yardeni Research, Inc. www.yardeni.com

Interest Rates Figure 15. 6.0 5.5

6.0

SOUTH KOREA CENTRAL BANK RATE (percent)

5.5

5.0

5.0

4.5

4.5

4.0

4.0

3.5

3.5

3.0

3.0

2.5

2.5

2.0

2.0

1.5

1.5

1/10

1.0

1.0

.5

.5 2006

7

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 7

SOUTH KOREA INTERBANK 3-MONTH RATE (percent)

6

6

5

5

4

4

3

3

2

2 1/10

1

1 2006

8

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018 8

SOUTH KOREA 10-YEAR GOVERNMENT BOND YIELD (percent)

6

6

4

4

1/10

2

0

2

yardeni.com 2006 2007 2008 Source: Haver Analytics.

0 2009

Page 12 / January 10, 2017 / South Korea

2010

2011

2012

2013

2014

2015

2016

2017

2018

Yardeni Research, Inc. www.yardeni.com

Stock Market Figure 16. 2400

2400

SOUTH KOREA: STOCK PRICE INDEX (Kospi)

2200

2200 1/10

2000

2000

1800

1800

1600

1600

1400

1400

1200

1200

200-day Moving Average 1000

1000 yardeni.com

800 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

800

2018

Source: Reuters America, Inc.

Page 13 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Industrial Production & Exports Figure 17. 140

50

SOUTH KOREA Dec

120

Nov

40

100

Industrial Production (ex construction) (2010=100)

30

80

Exports (billions US$) 60

20

40 10 20

yardeni.com

0

0

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Haver Analytics.

Page 14 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Exports Figure 18. 60000

60000

SOUTH KOREA EXPORTS (billion won, sa)

Dec

50000

40000

50000

40000

Total (51340.5) 30000

30000

20000

20000

10000

10000

yardeni.com

0

0

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Korea Customs Service and Haver Analytics.

Figure 19. 150

150

SOUTH KOREA EXPORTS (yearly percent change in won)

125

125

100

100

Total (7.3)

75

75

50

50

25

25 Dec

0

0

-25

-25 yardeni.com

-50

-50

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Korea Customs Service and Haver Analytics.

Page 15 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Exports Figure 20. 15000

15000

SOUTH KOREA EXPORTS TO CHINA (billion won, sa)

Dec

10000

10000

Total (13512.0)

5000

5000

yardeni.com

0

0

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Korea Customs Service and Haver Analytics.

Figure 21. 300

300

SOUTH KOREA EXPORTS TO CHINA (yearly percent change in won)

250

250

Total (10.7)

200

200

150

150

100

100

50

50 Dec

0

0

yardeni.com

-50

-50

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Korea Customs Service and Haver Analytics.

Page 16 / January 10, 2017 / South Korea

Yardeni Research, Inc. www.yardeni.com

Copyright (c) Yardeni Research, Inc. 2017. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on http://blog.yardeni.com www.yardeni.com, blog.yardeni.com, and YRI’s Apps for iPads and iPhones are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed on any Yardeni Research, Inc. product, service, report, email or website are proprietary to Yardeni Research, Inc. and constitute valuable intellectual property. No material from any part of www.yardeni.com, http://blog.yardeni.com blog.yardeni.com, and YRI’s Apps for iPads and iPhones may be downloaded, transmitted, broadcast, transferred, assigned, reproduced or in any other way used or otherwise disseminated in any form to any person or entity, without the explicit written consent of Yardeni Research, Inc. All unauthorized reproduction or other use of material from Yardeni Research, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Yardeni Research, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Yardeni Research, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights. The recipient should check any email and any attachments for the presence of viruses. Yardeni Research, Inc. accepts no liability for any damage caused by any virus transmitted by this company’s emails, website, blog and Apps. Additional information available on request. [email protected]