Retail Savings and Investments in South Korea – Coronavirus (COVID-19) Sector Impact

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 most countries across the world registering dramatic declines in economic activity for the year to date. Many economists and institutions have cut their forecasts as a number of countries have officially slipped into recession. South Korea entered a technical recession in Q2, with the Bank of Korea expecting GDP to contract by more than 2% compared to three month earlier.

The country has been able to control the COVID-19 pandemic comparatively well thanks to robust government measures. As of July 10 there were 13,338 confirmed cases, with the majority of individuals having already recovered. A gradual recovery in the economy will revive the retail savings and investments market going forward.

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 4.8% 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.

– Deposits will surge in 2020, as other asset classes lose their allure due to poor market performance and as government support to lower- and middle-income households boosts their ability to save. As deposits are the top asset class for these smaller-scale investors, almost all of any retained stimulus funds will flow into the deposit market. While growth is set to moderate over the forecast period with reviving consumer confidence and economic activities in the country, higher deposit holdings will have a negative effect on wealth generation in the current low-interest environment.

– 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.

– The technology sector’s importance as a contributor to HNW wealth has cushioned the impact of the pandemic to some extent. Government efforts are in place to increase investment in digitization, so as to enhance online operations for seamless teleworking and diversified supply chains. This should help ensure the tech and telecommunications sector continues hold up better than other sectors.

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.