South Korea Faces Deeper Recession Than in 1997-98, Nomura Says

South Korea faces a “deeper and longer” recession than during the 1997-1998 Asian financial crisis as the global slump pummels exports and indebted consumers and companies cut spending, Nomura Holdings Inc. said.
“The biggest difference this time around is the country’s exports won’t provide a cushion for a drop in local demand,” Nomura’s Hong Kong-based economist Kwon Young Sun said.
Asia’s fourth-largest economy will shrink 6.8 percent on average for the four quarters from the final three months of 2008, when the current recession began, Kwon estimates. That’s more than an average 4.5 percent contraction for the same period from the fourth quarter of 1997, he said.
Unlike during the Asian collapse a decade ago, the major overseas markets of the U.S., Europe and China have all faltered and that has led to a plunge in demand for Korean-made cars, mobile phones and computer chips. Exports will decline 12.2 percent this year and increase 7.9 percent next year, compared with a 12.7 percent gain in 1998, Nomura forecast.

Overseas shipments accounted for 63.5 percent of GDP in 2008, more than double the 29.4 percent in 1997, Kwon said.
“Domestic demand will take a longer time to recover as consumers and businesses are much more indebted now,” Kwon said. “So the economy is destined to fall further and longer as both exports and local demand dive.”
The ratio of household debt to income swelled to a record 149 percent in 2007, the highest in the region, as a property boom increased lending, Kwon said. Debt also climbed as people who lost jobs in the wake of corporate restructuring after the Asian crisis took out loans to start small businesses, he said.

‘Bleak Outlook’
“The bleak job-market outlook and the slump in assets markets will cause the household sector to respond promptly to the economic cycle, increasing the amount of their disposable income saved,” Kwon said.
The number of South Koreans with jobs dropped by 103,000 last month from a year earlier, the biggest decline in five years as manufacturers and retailers fired workers. The benchmark Kospi stock index has fallen 30 percent in the past year.
Private consumption will contract 7.1 percent this year, before gaining 4.8 percent in 2010, Nomura forecasts. That compares with a 13.4 percent slump in 1998 and a 11.5 percent rebound in 1999.
“Small and medium-sized enterprises, or SMEs, are facing severe financing constraints, which should help cut business investment substantially given SMEs account for 50 percent of manufacturing production,” Kwon said. “We expect domestic demand to overshoot on the downside in 2009.”
Investment will fall 19.9 percent in 2009 and rise 11.9 percent next year, he predicted. In contrast, after the previous recession in 1998, business spending jumped 36.8 percent in 1999.
“Our biggest concern beyond the current economic cycle is that a deeper and longer recession than the Asian crisis could exacerbate income inequ

[SigmaForex White Label]

Forex White Label Program

As your partner, our goal is to support you through the planning and launch phases and beyond to ensure a mutually successful and long-term business relationship
Establish your brand in the Forex Brokerage industry.

Our Forex White Label program is for individuals and institutions that want to establish a brand name and a presence in the Forex industry. As a white label partner, you will be provided with a platform branded with your name and logo as well as content for your introducing broker website. Also Sigma white label partner program enables banks and brokers to satisfy their customers' demand for online trading tools. Our trading solutions enable you to harness and develop already existing customer trading relationships and extract greater returns from them whilst streamlining internal trading operations and rendering them as efficient as possible.

You will also enjoy our 24-hour market, full service of back office support, and other administrative and support functions.

Ideal candidates for the Forex white label program include:

• Financial services firms that want to establish a new Forex brokerage division. For example, banks, insurance companies, etc.
• Trading firms and/or online brokers that want to offer a greater range of products to their customers. you will be providing your clients with a great value-added service while increasing the profitability of your firm.
• Companies offering Forex tools and advisory services - This can be websites or newsletters that provide an analysis of the Forex or futures market, advisory businesses, etc. that want to expand their web presence by offering online Forex trading capabilities to their existing client base.
• Forex White Label Introducing Brokers will enjoy the most advanced Forex trading software in the market. The web-based white label trading platform provides real time, streaming currency prices and instantaneous one click execution, real time management of currency positions, in addition to complete back office support and reporting features. Along with other tools to help traders make trading decisions. The software is also compatible with most operating systems. This means that your customers can trade currencies from any computer, anywhere in the world, 24 hours a day.

If you want to discuss your potential Forex White Label Introducing Brokerage business with us via mail