Dear Korea CQ members,

I hope you are having a wonderful day.

Last Tuesday, on February 6, Korea CQ toured KEB Hana Bank’s ‘Place 1’ located in Samsung-dong and listened to a special lecture on ‘2018 Economic View’ by Mr. Yong Jun Cho, the head of the Hana Financial Investment Research Center. 

Erwan Vilfeu, Yong Jun Cho, Christophe Piganiol, Susan Ling, Joohyun Ha, Youngha Go, Eun Gyung Na, Kwiyeon Kim, James Park, Ian Jeong, Sumi  Jang, Yun Jung Park, Jake Kim, Yang Sub Sim, Jin Joo Koo, Byeong Eon Lee, Yoon Young Kim, Choi Jungwha, Didier Beltoise, and Crystal Park participated in this forum.

Despite the cold weather, members joined us and warmly greeted each other. 

Everyone had a great time talking to each other during dinner with wine after the reception. 

After dinner, Mr. Jake Kim, executive director at Hana Financial Investment, guided us through ‘Place 1,’ at which they redefined the professional and rigid image of financial space to a place where culture, art, and life blend together.

Our tour began with Lerici Taylor’s suit exhibition on the 8^th floor.  

On the 7^th floor, a small exhibition of BMW’s premium motor cycle, Motorrad, was taking place.

Then, we moved to the 6^th floor where ‘CLUB 1,’ the premium private banking service provided by KEB Hana bank, is located. Members enjoyed looking around the beautiful and sophisticated study room on the same floor, and the stylish Scandinavian furnishings attracted members' attention. 

Also, members where surprised at the secret hidden room behind the study room wall. The secret room was called ‘Astel Ancnon,’ a listening space where people could experience high quality hi-fi audio system.

After the exiting tour, Mr. Yong Jun Cho, the head of Hana Financial Investment Research Center, gave a lecture on ‘2018 Economic View’.

Mr. Cho is also an advisory committee Member of KOSDAQ, and as well as the vice chairman of China’s Capital Market Research Society, Korea Financial Investment Association.

He was awarded the Grand Prize of Seoul Economic Securities last year, and has written a number of books on economy including his most recent ‘Learn about the best share in China through comics’ and ‘Invest in #1 share in China’.  

Mr. Cho said that the current economy is expanding due to increase in stock price and interest rate, and concluded that such a smooth economic cycle will last at least until the end of this year.

Giving an example of Korea’s profits from semiconductors in the market led by the 4^th industry, he stated that the economy of Korea is stable, and that it has a high potential to grow.

Moreover, he also referred to the Trump government's economic leaping strategies, explaining recent US economic trends and changes, and forecasting a stronger US dollar in the coming years. And all of the members paid great attention to the crisis that the Korean economy could face.

Everyone actively participated in Q & A. Many members asked how the world’s economy and the investment in the US dollar would turn out. 

Mr. Cho kindly gave detailed answers to the questions.

It was truly a meaningful time to look at domestic and overseas economic and market trends, and to hear about various economic issues that are happening today.

We would like to express our heartfelt gratitude to Mr. Yong Jun Cho for the interesting lecture, Mr. Jake Kim for inviting us and giving us a wonderful tour, and last but not least, every Korea CQ member for coming to the forum.

Also, we’d like to thank Mr. Yang Sub Sim, who put a lot of effort in organizing the event, and also Ms. Crystal Park for her excellent interpretation.

Thank you all for your unwavering support, and we wish you a pleasant day.

Please look below for the lecture notes of Mr. Yong Jun Cho's lecture.

Sincerely,

Korea CQ Arin Lee

For more pictures, please click the link below.

https://photos.app.goo.gl/1hhwPlHYkJaF9lIr2

<February 6, Lecture Notes>

‘2018 Economic View’

Lecturer: Mr. Yong Jun Cho, the head of the Hana Financial Investment Research Center

1. Summary of Financial Market Forecast

Despite the burden due to monetary policy normalization of the central bank, the economy will remain in good shape during the first half of this year. The US dollar will continue to rebound for while, although it won’t last long, and investment in developed and emerging nations (markets) will increase. In the second half of this year, increase in the market rate is expected to be limited due to concerns over the US benchmark interest rate and weakening mid- to long-term growth momentum.

2. Outlook on the real economy

It is the fourth industry that is leading the market and economy today. Companies with the largest share price in the US are ‘FANGs (Facebook, Amazon, Netflix, Google etc),’ and ‘BAT (Baidu, Alibaba, Tencent)’ in China, all of which are the 4th industrial companies of G2. Korea has also entered the 4th industrial revolution super cycle with semiconductors, and it is expected to continue smoothly in 2018.

3. United States' Economy

Despite the political upheaval since the Trump administration, the US corporate tax rate, which had been highest in the world, has been cut from 35% to 21%. Businesses that left the US due to high tax rates are returning, and US economic outlook is improving. On January 30, President Trump urged Congress for a permit in at least $ 1.5 trillion investment in new infrastructure investment and to improve the approval procedures. Economic growth and promotion is expected.

4. China's Economy

With the end of the long-term setting of economics, the Chinese stock market is expected to rebound and the exchange rate is going to stabilize until 2018. Since concerns about China's economy is rising due to possibilities of the Fed raising interest rates and hike in global prices and interest rates, China is now mostly focusing on reducing risk factors.

5. Europe's Economy

The eurozone has a relative advantage, and the global economy is booming. Economic growth is expected to increase production and investment in the region, with annual economic growth expected at around 2.2 in 2018.

6. Korea's Economy

It is expected that the economic growth will grow by 3.0% and the Korean won will hit 1020 ~ 1160 / USD in 2018. South Korea is steadily maintaining its economic growth rate at 3%.

Moreover, Korea has recorded surplus in trade and current account for five years, showing a strong foreign currency with its accumulated currency. Unless there is a big change in trend, its good economy and strong won will continue.

7. Global Economy

In 2018, gradual growth of global economy is expected to continue with low interest rates and the industrial revolution. However, due to slow economic recovery and wage improvement, economic growth and inflation will fall short of the pre-crises level.

Although the growth gap between the emerging markets such as China, India, Vietnam, and Brazil is limited (4.9%), they are somewhat superior to developed countries like the US thanks to increase in their trade volume.

< Q & A  > 

Q. Jungwha Choi, President of CICI : How is the prospect for the coffee industry?

A. Yong Jun Cho , Head of Hana Financial Investment Research Center :

The prospects of the coffee industry are good. The price of agricultural products are rising  as it is currently a period of inflation, so the prospects of the coffee industry are good.

Q. Christophe Piganiol, President of Zuellig Pharma Korea:

You said that the US interest rates are going up and that the world economy is getting better. However, if the bubble bursts, what kind of industry will be in difficulty?

A. Yong Jun Cho , Head of Hana Financial Investment Research Center :

The US stock price is rising tremendously, leading to increase in business profits. The US stock market will most likely stay stable until the end of this year. 

Q. Byeong Eon Lee, Executive Advisor of Hankookilbo :  Would it be worth it to investigate in dollars right now? 

A. Yong Jun Cho , Head of Hana Financial Investment Research Center :

USD has been strong over the past few years, but now USD is weak and KRW is stronger. We expect USD to rise either at the end of this year or early next year. Therefore, we do not recommend investing in dollars yet.

Q. Christophe Piganiol, President of Zuellig Pharma Korea: You said that the economy of Europe is also getting better and expecting 2% economic growth. However, I think Europe is going through economic difficulties with situations like Greece's bankruptcy and Brexit. Companies in Europe are evening returning to the US. Do you think Europe's economy will be alright? 

A. Yong Jun Cho , Head of Hana Financial Investment Research Center :

In the case of Europe, many countries are using the common currency ‘Euro’ together. Europe has undergone many unstable situations such as Greece's bankruptcy, and Germany's Chancellor Angela Merkel may step down, thus bringing change in Germany. However, I believe the world economy is good enough that such events will not matter. Despite the high number of incidents, we can expect a 2% economic growth rate because the current economy is very good.

Q. . Didier Beltoise , President of Cs : Do you mean that EUR is stronger than USD?

A. Yong Jun Cho , Head of Hana Financial Investment Research Center :

USD is expected to be weak for a year from now. Therefore,  the EUR, JPY and KRW, which are considered to be risky assets, are stronger than USDright now. The EUR is the more stable among them. So you can think of it as a time to invest in risky assets rather than the USD which is a stable asset.