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Korean Stocks Remain Calm As President Is Impeached
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South Korea’s parliament voted to impeach President Park Guen-hye by wide margin on Friday. Park has quickly become one of the young democracy’s most unpopular leaders following a well-documented corruption and cronyism scandal involving a close personal friend that was allowed unusual access to the presidency.
Park, who became the country’s first female president in 2012, has maintained that she did not commit any crimes, but millions have taken to the street in recent weeks to protest her dealings with Choi Soon-sil, a friend of Park’s since the president’s father was assassinated in 1979.
The relationship between Park and Choi is marred with mystery and suspicion. According to some Korean media, Choi acts as Park’s spiritual adviser to an almost cult-like religion. However, Park’s friendship with Choi goes much deeper than religion, and the president is accused of giving Choi unprecedented influence over the nation’s political affairs.
According to reports, Choi reviewed advance copies of speeches, selected Park’s wardrobe for public appearances, and perhaps pocketed some of the $70 million in charitable donations she solicited from major South Korean businesses.
Nevertheless, Park’s impeachment has barely made a dent in Korean stocks this week. The iShares MSCI South Korea Index Fund (EWY - Free Report) was down less than 0.6% in early morning trading Friday, and shares remain up over 3% this week. Although traders typically hate uncertainty, it appears like Park’s fate was already priced in to the market.
Another thing to consider, of course, is Samsung , the Korean electronics giant that is going through its own drama this week. Over the past month or so, Samsung has been dealing with heavy activist pressure to change up its corporate structure in the wake of the catastrophic scandal involving its self-combusting Galaxy Note 7 phones (Also read: Future Uncertain For Samsung As Company Considers Split).
Share of Samsung’s domestic stock were also down less than 0.6% on Friday morning, and the stock remains up over 3.7% on the week.
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Korean Stocks Remain Calm As President Is Impeached
South Korea’s parliament voted to impeach President Park Guen-hye by wide margin on Friday. Park has quickly become one of the young democracy’s most unpopular leaders following a well-documented corruption and cronyism scandal involving a close personal friend that was allowed unusual access to the presidency.
Park, who became the country’s first female president in 2012, has maintained that she did not commit any crimes, but millions have taken to the street in recent weeks to protest her dealings with Choi Soon-sil, a friend of Park’s since the president’s father was assassinated in 1979.
The relationship between Park and Choi is marred with mystery and suspicion. According to some Korean media, Choi acts as Park’s spiritual adviser to an almost cult-like religion. However, Park’s friendship with Choi goes much deeper than religion, and the president is accused of giving Choi unprecedented influence over the nation’s political affairs.
According to reports, Choi reviewed advance copies of speeches, selected Park’s wardrobe for public appearances, and perhaps pocketed some of the $70 million in charitable donations she solicited from major South Korean businesses.
Nevertheless, Park’s impeachment has barely made a dent in Korean stocks this week. The iShares MSCI South Korea Index Fund (EWY - Free Report) was down less than 0.6% in early morning trading Friday, and shares remain up over 3% this week. Although traders typically hate uncertainty, it appears like Park’s fate was already priced in to the market.
Another thing to consider, of course, is Samsung , the Korean electronics giant that is going through its own drama this week. Over the past month or so, Samsung has been dealing with heavy activist pressure to change up its corporate structure in the wake of the catastrophic scandal involving its self-combusting Galaxy Note 7 phones (Also read: Future Uncertain For Samsung As Company Considers Split).
Share of Samsung’s domestic stock were also down less than 0.6% on Friday morning, and the stock remains up over 3.7% on the week.
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>