World
When the chips go up: Big banks bet on S. Korea, Taiwan stocks for 2023
Dec 1 (Reuters) – World banks are turning bullish on South Korean and Taiwanese shares, anticipating a revival in semiconductors to drive a rally subsequent yr, whereas they see Japan’s market as resilient thanks partly to its weak forex.
The calls come as U.S. charges are nonetheless rising, with most markets world wide eyeing their worst annual returns because the 2008 international monetary disaster and with chipmakers’ earnings cratering.
Goldman Sachs says South Korean shares are the financial institution’s prime “rebound candidate” for 2023 because of low valuations, made cheaper by a nosediving Korean gained, and as corporations profit from an anticipated restoration in Chinese language demand. It expects a 2023 return in greenback phrases of 30%.
Morgan Stanley additionally offers Korea prime billing. Along with Taiwan, it’s the finest place to be, says the financial institution, as the 2 markets have a fame as “early-cycle” leaders within the demand restoration.
Financial institution of America, UBS, Societe Generale and Deutsche Financial institution’s wealth supervisor DWS are all bullish on Korean shares, with analysts’ conviction in that commerce mendacity in sharp distinction to its divided view on India and China.
“Within the semiconductor space, demand ought to backside within the first quarter of subsequent yr and the market all the time begins to run earlier than that,” stated DWS’ Asia-Pacific chief funding officer, Sean Taylor, who added Korean publicity in latest months.
“We expect (Korean shares) bought off an excessive amount of in September and August.”
South Korea’s benchmark KOSPI index (.KS11) has misplaced about 17% thus far this yr and the gained has declined 9%, although each have proven indicators of restoration in latest months.
Goldman Sachs additionally famous that 5 years of promoting has pushed international possession of Korean shares to its lowest stage since 2009, however inflows of about $6 billion since end-June “signifies a flip in international curiosity” that might carry the market additional.
Societe Generale’s suggestion for buyers to extend their publicity to Korea and Taiwan comes on the expense of China, India and Indonesia. Goldman’s desire for Korean shares comes because it has recommended a discount in Brazil publicity. Morgan Stanley downgraded its view on Indian publicity in October, when it upgraded its suggestion for South Korea.
Morgan Stanley is most bullish on chipmakers turning out commoditised low-cost chips in addition to chips destined for shopper items – together with corporations resembling Samsung Electronics (005930.KS) or SK Hynix (000660.KS). Morgan Stanley has a worth goal for SK Hynix about 50% above the present share worth.
RISK-REWARD
Taiwan and Japan provide points of interest for some comparable and a few novel causes. Like South Korea, Taiwan (.TWII) is one other heavily-sold and chip-maker dominated market – although tensions with China make some buyers a bit much less enthusiastic.
Goldman Sachs is underweight Taiwanese shares, citing geopolitical danger, whereas Financial institution of America is impartial and its most up-to-date survey of Asian fund managers exhibits they’re bearish.
Japan (.N225) additionally provides chips publicity in addition to some safety and diversification, with the weak yen additionally a tailwind for exporters and sometimes a boon for equities.
“A sustained keep at such undervalued ranges, as anticipated by our FX strategists, augurs properly for Japan equities,” stated Financial institution of America analysts, who advocate obese allocation to Japan. Morgan Stanley, DWS, UBS are additionally optimistic, as is Goldman Sachs, particularly for the second half when it forecasts inflows.
There may be much less settlement with regards to China, the place large buyers appear to be in a wait-and-see mode, or India the place funding homes really feel an 8% rally for the benchmark Sensex (.BSESN) has left valuations a bit expensive.
To make certain, a lot of the banks’ funding calls relaxation on assumptions that U.S. rates of interest ultimately cease going up and China ultimately relaxes its COVID guidelines.
In the meantime, Taiwan and South Korea are each geopolitical flashpoints – however analysts argue no less than a few of that’s already within the worth.
“There was some political concern in each Korea and Taiwan for a very long time,” stated Societe Generale’s head of Asia fairness technique, Frank Benzimra.
“Issues can all the time worsen,” he stated. “However when it comes to the risk-reward, what we discover is that a lot of the lowly valued markets, whether or not it is Korea or Taiwan … have extra restricted draw back due to the buildup of dangerous information that we now have seen during the last 12 months.”
Reporting by Harish Sridharan in Bengaluru; Enhancing by Ana Nicolaci da Costa
Our Requirements: The Thomson Reuters Belief Rules.
World
Memes, Jokes and Cats: South Koreans Use Parody for Political Protest
As South Koreans took to the streets this month demanding the ousting of their president, some found an unexpected outlet to express their fury: jokes and satire.
They hoisted banners and flags with whimsical messages about cats, sea otters and food. They waved signs joking that President Yoon Suk Yeol’s declaration of martial law had forced them to leave the comfort of their beds. Pictures of the flags spread widely on social media.
The idea was to use humor to build solidarity against Mr. Yoon, who has vowed to fight his impeachment over his ill-fated martial law decree on Dec. 3. Some waved flags for nonexistent groups like the so-called Dumpling Association, a parody of real groups like labor unions, churches or student clubs.
“I just wanted to show that we were here as part of the people even if we aren’t actually a part of a civic group,” said Kim Sae-rim, 28, who waved the flag of the dumpling group at a recent protest she went to with friends. Some groups referred to other local favorites like pizza and red bean pastries.
Kwon Oh-hyouck, a veteran protester, said that he had first seen such flags emerge during demonstrations in 2016 and 2017 that ultimately resulted in the removal of President Park Geun-hye. Mr. Kwon said that satire was part of the Korean spirit of protest.
“People satirize serious situations, even when those in power come out with guns and knives,” he said. “They are not intimidated.”
In the past month, protesters have come up with a wide range of unorthodox groupings. Some were self-proclaimed homebodies. Still others came together as people who suffered from motion sickness.
Lee Kihoon, a professor of modern Korean history at Yonsei University in Seoul, said that he believed the flags at this month’s protests were an expression of the diversity of people galvanized by the president’s attempt to impose military rule.
“They’re trying to say: ‘Even for those of us who have nothing to do with political groups, this situation is unacceptable,’” he said. “‘I’m not a member of a party or anything, but this is outrageous.’”
Some held signs ridiculing Mr. Yoon, saying that he had separated them from their pets at home and disrupted their routine of watching Korean dramas. One group called itself a union of people running behind schedule, referring to the idea that the need to protest over martial law had forced them to reschedule their appointments.
And of course, there were animals, both real and fake.
South Koreans have shown that protests for serious causes — like the ousting of a president — can still have an inviting, optimistic and carnival-like atmosphere.
“I don’t know if the protesters realize it, but even though they’re angry, they haven’t gotten solemn, heavy or moralistic,” Mr. Lee said. “The flags have had an effect of softening and relaxing the tension.”
On the day that lawmakers voted to impeach Mr. Yoon, protesters who were K-pop fans brought lightsticks to rallies and danced to pop songs blasting from speakers. “Even though this is a serious day,” said Lee Jung-min, a 31-year-old fan of the band Big Bang, “we might as well enjoy it and keep spirits up.”
World
Two US Navy pilots shot down over Red Sea in apparent 'friendly fire' incident: US military
Two U.S. Navy pilots were shot down Sunday over the Red Sea in what appeared to be “friendly fire”, the U.S. military said.
The pilots were found alive after they ejected from their aircraft, with one suffering minor injuries.
The incident demonstrates the pervasive dangers in the Red Sea corridor amid ongoing attacks on shipping by the Iranian-backed Houthis, even as U.S. and European military coalitions patrol the area.
The U.S. military had conducted airstrikes targeting Yemen’s Houthi rebels at the time, but U.S. Central Command did not elaborate on what their mission was.
US NAVY SHIPS REPEL ATTACK FROM HOUTHIS IN GULF OF ADEN
The military said the aircraft shot down was a two-seat F/A-18 Super Hornet fighter jet assigned to the “Red Rippers” of Strike Fighter Squadron 11 out of Naval Air Station Oceana, Virginia.
The F/A-18 shot down had just flown off the deck of the USS Harry S. Truman aircraft carrier, according to Central Command. On Dec. 15, Central Command said the Truman had entered the Mideast, but did not specify that the carrier and its battle group were in the Red Sea.
“The guided missile cruiser USS Gettysburg, which is part of the USS Harry S. Truman Carrier Strike Group, mistakenly fired on and hit the F/A-18,” Central Command said in a statement.
It is unclear how the Gettysburg had mistaked an F/A-18 for an enemy aircraft or missile, particularly since ships in a battle group are linked by radar and radio communication.
US MILITARY CONDUCTS SUCCESSFUL AIRSTRIKES ON HOUTHI REBEL FORCES IN YEMEN
Central Command said that warships and aircraft earlier shot down multiple Houthi drones and an anti-ship cruise missile launched by the rebels. Fire from the Houthis has previously forced sailors to make decisions in seconds.
The U.S., since the Truman arrived, has ramped up its airstrikes targeting the Houthis and their missile fire into the Red Sea and the surrounding area. But an American warship group in the region may lead to additional attacks from the rebels.
On Saturday night and into Sunday, U.S. warplanes conducted airstrikes that shook Yemen’s capital of Sanaa, which the Houthis have held for a decade. Central Command said the strikes targeted a “missile storage facility” and a “command-and-control facility.”
Houthi-controlled media reported strikes in both Sanaa and around the port city of Hodeida, but did not disclose details on any casualties or damage.
The Houthis later acknowledged the aircraft being shot down in the Red Sea.
Since the start of the Israel-Hamas war in October of last year, the Houthis have targeted about 100 merchant vessels with missiles and drones.
The rebels say that they target ships linked to Israel, the U.S. or the U.K. to force an end to Israel’s war against Hamas in Gaza, which began after Hamas’ surprise attack against Israel on Oct. 7, 2023, although many of the ships the rebels have attacked have little or no connection to the ongoing war, including some headed for Iran.
The Houthis also have increasingly targeted Israel with drones and missiles, leading to retaliatory airstrikes from Israeli forces.
The Associated Press contributed to this report.
World
AfD party calls for big rally after Germany's Christmas market attack
Leading right-wing figures in Europe have also weighed in, criticising the German authorities for failing to take stronger preventative action.
German far-right political party Alternative for Germany (AfD) is calling for a major rally following the attack at a Christmas market in Magdeburg which left several people dead and hundreds injured.
At a memorial site for the victims, AfD co-leader Tino Chrupalla called on Interior Minister Nancy Faeser to take stronger action to ensure the safety of the German public.
“I am now demanding answers from the interior minister: What is actually going on here in this country? What is actually happening in this country? We put up with it week after week, we put up with attacks, we put up with murders of our own people. This has to be cleared up now, and these phrases from politicians that things can’t go on like this, which I’ve heard again today, are actually upsetting,” Chrupalla told the press at the site.
Experts are now raising concerns that far-right groups could exploit the tragedy to fuel their anti-immigration rhetoric after police identified the assailant as a doctor from Saudi Arabia.
“Magdeburg is in eastern Germany where the support for the AfD is quite high. So, in elections usually, they have in the region more than one-third of the votes. So about 30% of the votes in the city, not as much as in the rural areas around,” says Matthias Quent, Professor of Sociology at Magdeburg-Stendal University of Applied Sciences.
“The region in general, eastern Germany, is a hotspot of far-right mobilisations. And we are facing election campaigns until the federal elections in February. And so this is not just a critical time because of Christmas and the trust that gets destroyed by such an attack but, also, regarding questions of disinformation and polarisation and the spread of hate that will and could happen over these kinds of attacks now,” he added.
Leading right-wing figures in Europe have also weighed in, criticising the German authorities for failing to take stronger preventative action.
Hungarian Prime Minister Viktor Orbán drew a direct link between immigration and Friday’s deadly attack in Germany, telling a news conference on Saturday, “These phenomena have only existed in Europe since the start of the migration crisis. So there is no doubt that there is a link between the changed world in Western Europe, the migration that flows there, especially illegal migration and terrorist acts.”
However, Quent explains that this particular case becomes more complex as further details emerge on the background of the attacker.
Investigators have found that the perpetrator had tried to build connections to far-right organisations in Germany and the UK, including Germany’s far-right AfD party as well as Tommy Robinson, the founder of the far-right English Defence League.
“So it’s a very complicated case we are facing here. And it’s not an Islamist attack. It’s quite sure, a kind of anti-Islam. More like far-right attacks than any other, if you want to search a kind of context on the political radar,” Quent says.
Identified by local media as 50-year-old Taleb A., a psychiatry and psychotherapy specialist, authorities said he had been living in Germany for two decades.
Taleb’s alleged X account is filled with tweets and retweets focusing on anti-Islam themes and criticism of the religion while sharing congratulatory notes to Muslims who left the faith.
He also described himself as a former Muslim.
He was critical of German authorities, saying they had failed to do enough to combat the “Islamism of Europe.”
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