No Quick End Seen to Share, Won Slumps

Volatility reigns in financial markets. The Seoul stock market lost 50 points in three days and the won continued its slide. Analysts agree that recovery will be difficult until uncertainties in the corporate environment are cleared up and the international financial climate improves.

The rush to unload financial stocks is generally regarded as international investors' negative reaction to assistance planned for Hyundai companies. "What is necessary to boost confidence is consistent efforts for restructuring, including that of Hyundai," an analyst said.

An analyst at Samsung Securities, Kim Ji-young, said, "Korean markets contain more high-tech stocks than other markets and tend to be highly correlated with the Nasdaq." Analysts are skeptical about a quick rebound. "Unless the United States lowers interest rates dramatically, it is difficult to predict a market recovery anytime within the month," Mr. Kim said.

Another analyst shared that view. "The market is likely to fall to the level it started the year at, but it will be more difficult to make the kind of recovery as it did early in the year," SK Securities' Park Yong-sun said.

In the foreign exchange market, the won followed the yen's slide against the U.S. dollar, but concern is not as widespread as for the stock market. The currency dropped by 8 won against the dollar in early trading Tuesday, but recovered in afternoon trading.

The won's slide totaled 2.5 percent during the month, but it stands only 1 percent lower than its level at the end of last year. Analysts believe the decline compares favorably with the 5 percent decline the yen suffered during the same period. The consensus is that the won rate will rise to just above 1,300.

by Cheong Chul-gun