Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
Investing.com -- On 4 April 2025, Korea’s Constitutional Court unanimously upheld the impeachment of President Yoon Seok-Ryul, providing a respite from potential political turmoil. The decision averts a possible radical response from the powerful opposition party, which would have been likely if Yoon had made a comeback.
The next Presidential Election is now due within 60 days, or before 4 June 2025. Historical data shows that in the two previous instances where a president was impeached, the opposition party emerged victorious over the ruling party.
This trend might continue, as evidenced by the recent snap election on 2 April 2025, where the ruling party managed to secure only one victory out of six mayor/education commissioner elections.
As per Macquarie analysts, Mr. Lee Jae-Myung, despite legal challenges, is the leading candidate for the Minju party. They stated, "We think Mr. Lee is more pragmatic and less ideological than the previous Minju Party President, Moon Jae-In." Meanwhile, the ruling party is yet to present a leading candidate.
The market is currently factoring in a reciprocal tariff of 25% on Korean exports to the US, which is close to the worst-case scenario. This is significantly higher than the 10-15% initially anticipated by the market, potentially prompting a downward revision of earnings expectations.
However, major exporters might gain some price competitiveness due to a strengthening JPY and the relative size of reciprocal tariffs compared to Chinese exports to the US.
Macquarie analysts believe the final tariff will be lower than 25%, indicating some potential upside. They stated, "we favour the competitive export sectors (semicon, auto, defence, and shipbuilding) over domestic plays (consumer and banks)."
Amid growing concerns about a trade war, Korean defence and shipbuilding sectors appear relatively insulated. The defence sector has no exposure to the US, and the US relies on Korean shipbuilding capabilities for its security needs.
Additionally, Macquarie analysts have turned constructive on the entertainment and internet sectors, which have been long neglected in the market.
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