From a Western financial professional’s perspective, South Korea has traditionally been overlooked. The most familiar big three finance hubs in the East were forged in Singapore, Hong Kong, and Tokyo. However, Korea is redefining itself as a major marketplace for a specific breed of financial product, broadly labeled as “derivatives”. Here we’ll give a crash course on derivatives and their place in financial markets, inspect their recent appearance in emerging markets, and theorize as to the effect they will have on Korea’s global financial presence and the economy as a whole.

In the fourteen days since a verdict charged the Democratic People’s Republic of Korea (DPRK/The North) with sinking the Republic of Korea’s (ROK/The South) Cheonan warship, global investors have realigned risks on the Korean Peninsula at the center of their radars. In this edition of the Korea Economic Slice on KBC, we’ll venture into history to gauge the significance of the recent alleged attack on the Cheonan and analyze the potential outcomes and economic repercussions. Then, we’ll move to identify the coming week’s crucial economic reports, technical indicators from the KOSPI, and the effects of global risks in the Korea economy…

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Looking to the week ahead, many questions regarding the strength of Korea’s economy from the stance of consumers, businesses, and international investors will become much clearer through the aforementioned econ data. However, the KOSPI Korean equity index, the Korean Won, and yields on Korean debt will continue to be heavily influenced by geopolitical factors surrounding the conflict with North Korea and developments in global financial markets, resulting from sovereign default risks in Europe.