Jardine Fleming downgrades South Korea over banking fears

PUBLISHED : Friday, 19 June, 1998, 12:00am
UPDATED : Friday, 19 June, 1998, 12:00am

Jardine Fleming has downgraded its stance on South Korean equities on fears that the country may see a renewed banking crisis. 'Our latest estimates suggest that on a worst-case scenario non-performing loans could rise by as much as 68 per cent this year,' strategist Andrew Houston said. 'That would swamp the current 50 billion won [about HK$271.95 million] bank bailout package and could prompt a fresh banking crisis.' The market recommendation had been switched to underweight from neutral, he said.

South Korea Finance and Economy Minister Lee Kyu-sung said yesterday the country had sufficient reserves to withstand any future problems.