Retail Savings & Investments in South Korea: Coronavirus (COVID-19) Sector Impact

Retail Savings & Investments in South Korea: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020, and many experts predicting the potential onset of recessionary environments.

A similar trend is also expected in South Korea, as economic growth in the country is set to have dipped in the first quarter of 2020 and will decelerate further if the disease is not controlled at the earliest possible opportunity. The decline will have an adverse impact on all sectors, including retail investments.

This report focuses on the impact of the Coronavirus outbreak on the South Korean economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

- South Korea’s total retail savings and investments market is forecast to grow by 2.7% during the year, making it one of the few developed nations expected to record an increase. It is also one of the few markets to see its growth revised upward for 2020, as government measures to control the COVID-19 crisis will boost retail savings.
- Retail deposits and bond holdings, on the other hand, are set to fare better than initially expected courtesy of a flight to safety away from risk assets. However, more pronounced declines in risk assets holdings are expected to result in a total retail holdings forecast for 2020 that is 7.2 percentage points (pp) lower than initially predicted before the onset of COVID-19. Equities and mutual funds will rally again in 2021, driven by the broader global economic recovery.
- The immediate effects of the COVID-19 crisis on the South Korean HNW market are expected to be relatively small, and will mostly be confined to the travel, tourism, and entertainment sectors. The country’s swift control of the virus has made its immediate effects relatively modest, and will stimulate the generation of wealth from the crucial healthcare field - by far the most important HNW wealth generator in South Korea.
- By contrast, the global recession generated by the impact of COVID-19 on the rest of the world will hit South Korean HNW wealth generation hard due to the country’s prominence as an export nation. Until there is a broader recovery in key export markets in the US and Europe, the generation of wealth will be curtailed.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the South Korean retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the South Korean retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in South Korea, including deposits, mutual funds, equities, and bonds.