Tag Archives: korea
Emerging Market Investors Hide Out in ‘Korexico’
http://www.ft.com/cms/s/0/7bb3efaa-1c85-11e3-a8a3-00144feab7de.html#ixzz2f3XJ2xx3 By Paul J Davies Markets are awash with buzzwords. Ever since Brics was coined we have recoiled from PIIGS, grappled with Chimerica and been sceptical about both Abenomics and Liconomics. So here is an aide memoire for where to invest when the US Federal Reserve threatens to taper its ultra-loose monetary policy and emerging markets sag with a draining of vital liquidity. When the markets correct, go “Korexico”. South Korea and Mexico have been two of the best defensive stories around in emerging markets in recent months for a handful of simple reasons: their exports are geared towards a US recovery, they did not suck in the hot money unleashed by central banks and they have not seen credit booms in the past two years. Stock markets in both countries suffered with the rest after Fed chairman Ben Bernanke first talked of “tapering” on May 22. However, they did not fall as far and they recovered more strongly. Stocks in Brazil, Indonesia, Thailand, and the Philippines fell deeply into late June and have not enjoyed a big bounce from the recent weaker US economic data that may have put off the end of “quantitative easing”. Korea’s Kospi index fell 11 per cent at worst by the last week of June and is now back to where it was in late May. Mexico did not even drop that far, losing only about 6 per cent at most. Now it is up 1.5 per cent. The other four were down between 15 and 24 per cent at worst. Brazil’s Bovespa is still 5.5 per cent lower since late May, while Bangkok’s SET, Jakarta’s JCI and the PCOMP in Manila are all down about 17 per cent. Part of the story is in fund flows. Both Korea and Mexico suffered outflows from equity markets at first, but not for long. Mexican markets saw almost $4bn of foreign cash leave stock markets in June, but more than $2bn return in July and August. In Korea, where data are published daily, inflows of more than $7bn since the end of June have more than replaced the outflows of $6.6bn during June. What is more, according to Freya Beamish at Lombard Street Research in Hong Kong, money that came out of Korean equities did not leave the country. “When the taper hysteria first hit, foreigners pulled out of Korean equities in the same way as they did across Asia,” she says. “But they went into Korean bonds. Then when the taper concerns eased foreigners went back into equities.” So what has kept these markets attractive and is the defensive story justified? Both have avoided the hot money problem of other emerging markets to a great degree. On the credit side, bank lending to GDP in Korea may look high at 86.5 per cent, but it is lower than many Asian neighbours and has declined a few points since 2009. Other Asian markets have seen explosive credit growth. In Mexico, the ratio has barely moved, remaining at about 20 per cent of GDP. Their stock markets attracted less hot cash, too, especially compared with the dizzying highs reached by the Philippines, Thailand and Indonesia. Korea and Mexico are both exposed to a US recovery via exports. More than two-thirds of Mexico’s exports head north across the border, but only about 10 per cent of Korea’s go to the US. But while Korea is much more dependent on China in general for exports, its key industries of electronics and cars are more influenced by US buying than Chinese. A boon for Korea has been Japan. The yen’s recent depreciation was meant to hit Korea’s competitiveness – but that has not happened. Oddly, a boon for Korea has been Japan. The yen’s recent depreciation was meant to hit Korea’s competitiveness – but that has not happened. “At the corporate level, there had been a concern about renewed competition from Japan benefiting from a weaker yen, but Japanese companies have focused on restoring profitability not boosting sales,” says Jeff Shen, head of emerging markets at BlackRock. But it is not entirely rosy. For a start, first-half earnings were a big disappointment. According to Citigroup, almost half of Korean companies missed analyst estimates and less than 20 per cent beat them – the worst in Asia. In Mexico, again half of companies missed forecasts, but fewer than one-in-ten beat them, the worst in Latin America. In Korea, investors were not expecting great things. The Kospi trades on 8-times forward earnings, one of the cheapest in Asia and below its average over the past 10 years, according to JPMorgan. Mexico, however, is one of the most expensive markets in the world on 17 times forward earnings, a good way above its average. This could well prove a dangerous place to be. For both countries, a sustained US recovery is what will really help – and that is far from certain. Their key attraction in the months ahead is more likely to be as a short-term haven from bouts of taper-hysteria in other emerging markets. Korexico is less a destination than a hide-out. paul.j.davies@ft.com Continue reading
Meeting Booming Asian Pellet Demand: How Competitive Are Regional Play
CMT’s Biomass Pellets Trade & Power summit, put together with support from Premium Sponsor Pellet Association Malaysia (PAM) and Agensi Inovasi Malaysia (AIM), in Seoul, on the 09-12 September, will set the stage for deep analysis of the ground realities in pellet trade patterns, feedstocks uncertainties, sourcing strategy, sustainability initiatives and pricing dynamics in the North East Asian biomass value chain. Asian biomass markets are witnessing profound shifts in trade and feedstocks sourcing with South Korea and Japan setting the pace for China, Thailand, Indonesia and Malaysia. The Korean RPS (Renewable Portfolio Standard) and the Japanese feed-in tariffs (FiTs) for biomass have been important enablers of biomass trade in the region. Despite the potential, the Asian biomass market still face an uncertain future due to diverse challenges in cultivation, sub optimal pellet capacities, price volatilities, and cross border trade shifts. Korean and Japan’s demand for bioenergy depends on competitive sourcing of pellets from global sources. Moving forward, global and regional Asian pellet suppliers will have to invent novel supply models to remain competitive. Among the panelists are Chang Joo Ok, President & CEO of Korea East-West Power Co., delivering the keynote address and Timothy Ong, interim Chairman of Pellet Association Malaysia (PAM) speaking on the new initiatives in Malaysian biomass trade. Addressing Biomass pellet trade and development of wood pellets market trends is Prof. Gyu-Seong Han from Chungbuk National University (Forest Product Marketing Center), while global trade dynamics end is covered by Nick Tsirigotis of EDF Trading. Sharing DONG Energy’s experiences in conversion of coal to wood pellets fired power plant is Jens Price Wolf and elaborating on sustainable supply strategies will be Matt Bovelander of Indufor Asia Pacific Ltd. An inside perspective on going biomass-based power generation projects from South Korea’s top power utilities, Korea Southern Power (KOSPO), Korea East-West Power (EWP), Korea South-East Power (KOSEP), Korea Western Power (KOWEPO) and Korea Midland Power (KOMIPO) allows for a rare opportunity to assess the emerging scenario. The modalities of intra-regional alliance models will be explored by JP Jaepil Song, Eco-Frontier while Philippines project status update will be provided by Michael Paik, EnerOne, Inc. Bas Melssen from Agensi Inovasi Malaysia will present an overview of Malaysia’s National Biomass Strategy 2020, International biomass pellet trade shifts will be addressed by Todd G. Bush, Green Circle Bio Energy Inc., and the Russian wood pellet market by Dr. Olga Rakitova, The National Bioenergy Union, Russia. For more information and registration contact Ms Hafizah hafizah@cmtsp.com.sg at +65 63469218 & for more details. http://www.cmtevents.com Continue reading
Genetically Engineering Jatropha Plants for Large Scale Production
By Futurity | Thu, 18 July 2013 Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more. Scientists have identified the first step toward engineering a more drought-resistant variety of Jatropha, a potential biofuel plant. Jatropha has seeds with high oil content. But the oil’s potential as a biofuel is limited because, for large-scale production, this shrub-like plant needs the same amount of care and resources as crop plants. “It is thought that Jatropha‘s future lies in further improvement of Jatropha for large-scale production on marginal, non-food croplands through breeding and/or biotechnology,” says John E. Carlson, professor of molecular genetics at Penn State. “The more that is known about the genetic basis of Jatropha‘s key attributes such as drought tolerance, the more readily Jatropha improvement will progress.” According to Carlson, Jatropha currently grows best in tropical countries and is already being cultivated as a biofuel on a small scale in India, Southeast Asia, and Africa. Breeding a strain that could do well in arid, barren conditions could enable mass cultivation, but large-scale production may still be decades away. Researchers looked at a little known gene—JcPIP1—because a similar gene in the model plant Arabidopsis is known to play a role in drought response. They also examined JcPIP2, a potential drought response gene in Jatropha identified in 2007 by researchers at Sichuan University. They reported their findings today in the Journal of Plant Physiology. The JcPIP genes code for membrane channels called aquaporins, which are responsible for transporting and balancing water throughout the plant, though exactly how each gene affects aquaporin behavior under environmental stress remains unclear. However, researchers have found that JcPIP1 and JcPIP2 are expressed at different times during a stressful situation, which hints at what roles they play in response and recovery. By growing unmodified Jatropha samples in conditions simulating high soil salinity and low water availability, the researchers showed that Jatropha was normally more vulnerable and slower to recover from high salinity than from drought conditions. Using a tobacco mosaic virus to transiently transform Jatropha, the researchers created plants in which JcPIP2 or JcPIP1 was temporarily disabled. They subjected the modified samples to six days of stress and six days of recovery. To gauge the plants’ stress responses, they noted physical changes and measured root damage, leaf growth, electrolyte leakage in the leaves, and sap flow and volume. The researchers found that these stress responses were about the same between the two variants under drought conditions. However, plants with JcPIP1 disabled were slower to recover from salt damage. Analysis of plant parts during the stress and recovery stages showed that JcPIP2 was mostly active in the early stages of stress while JcPIP1 exp ression was greater during recovery. The timing indicates that JcPIP1 may be crucial in helping Jatropha recover from damage while JcPIP2 may play a role in prevention. How the two genes affect other plant functions remains unknown, and how large a part they play in the entire network of drought resistance relies on further study. “Plants have complex genetic and biochemical pathways for environmental stress resistance, that includes (multiple) genes and pathways,” says Carlson. “This inherent redundancy in stress responses ensures survival under varying environmental conditions, and provides many possible approaches to improving resistance.” According to the research team, the next step is to find how the JcPIP genes work at the cellular level, which can provide more detailed profiles of each gene’s exact function. Other researchers on this project contributed from Chonnam National University in Korea, University of Copenhagen, and Wonkwang University in Korea. The Korea Rural Development Agency, National Research Foundation of Korea, and the Korean Ministry of Education, Science, and Technology funded this study. By. A’ndrea Elyse Messer Continue reading
