Strategist: Further Profit-Taking in Korean Stock Market May Undermine Won Stability

On June 5, Chang Wei Liang from DBS Group Research stated in a report that further profit-taking by investors in the Korean stock market poses a risk to the stability of the won. He noted that this risk is particularly pronounced given that Korean exporters have not fully repatriated their overseas earnings and that oil prices remain sticky around $100 per barrel. The forex and credit bond strategist pointed out that after the Korean Composite Index has risen over 90% this year, profit-taking by foreign investors has led to capital outflows, which is related to the weakening of the won. Chang indicated that with the dollar surpassing 1,530 won, volatility in semiconductor stocks could pose another risk. Major memory chip makers Samsung Electronics and SK Hynix fell by 6.4% and 9.9%, respectively, dragging the benchmark index down by 5.5% on that day.