News that North Korea, on Tuesday, fired an unspecified number of shells at a South Korean Island, near the countries’ disputed western border, marks a serious escalation in tensions on the Korean Peninsula.…
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For professional investors and advisers only
Within our Asia ex Japan portfolios we have been underweight South Korea for some time. Due to the ongoing nature of this event, it would be inappropriate for us to speculate on the long-term impact of the action, however, today we have seen a decline in commodity and equity prices worldwide. With global events already weighing on the markets, the MSCI Asia Pacific (ex Japan) fell 2%, while the dollar rose against all major counterparts as investors sought safety. Government bonds and gold have also seen an increase in demand.
Latest reports indicate that at least one soldier has been killed and more than dozen injured in the incident, however, any loss of civilian life will be a critical issue in determining how this incident will unfold.
According to a statement by South Korea’s Joint Chiefs of Staff, South Korea returned fire and its military is currently on high alert. A statement published in South Korea’s military website went onto say that it would ‘sternly retaliate’ to further provocation.
As South Korea continues to assess the casualties, there are reports that several homes are on fire in the affected region, raising fears of some civilian loss of life.
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Source: ETFWorld – Schroders
