18 February 2010
Major Points: Recent volatility in USD/KRW reveals vulnerability of KRW to external shocks; Strengthening FX market environment has limitations on stabilizing market; Remaining sensitivity of risk aversion leads to a weaker KRW; Economic recovery/delay of BOK policy rate hikes also causes a weaker KRW; We now forecast annual average USD/KRW to rise 1,100 (previous 1,074)
16 February 2010
We continue to argue that Korean auto OEMs are poised to increase further presence in the US, in tandem with 1) the replacement cycle of volume models, 2) enhancing residual value and 3) noise from Japanese OEMs. Looking at a combined US retail market share of 7.7% in 10E vs. 7.0% last year, however, we see upside risk to our estimates. We reiterate bullish calls on both HMC (1M, TP: W160K) and KIA (1M), while lifting TP on KIA to W28,000 on upward earnings revision ground.