South Korea’s exchange traded fund (ETF) shot up a nice 3% in trading yesterday, possibly owing in part to expanding department store sales.
They expanded for the fourth consecutive month, reports Seyoon Kim for Bloomberg. Consumers snatched up luxury items, clothes and food, which sent sales up 6.5% from a year earlier. March sales rose 6.7%.
One of those stores, Shinsegae, is 2% of the iShares MSCI South Korea (EWY). Year-to-date it’s down 10%. The consumer goods sector makes up 26% of the fund.
On the flip side is that the country’s vice finance minister said the economy is in a downturn much like the rest of the world. The jobless rate rose to a five-month high in April as manufacturers, builders and retailers let workers go. This could be an indication that department store sales may cool.
Britain’s biggest retailer is planning to purchase 36 discount stores from South Korea’s E-Land for $1.9 billion, report Rhee So-eui and Rachel Sanderson for Reuters. This acquisition could challenge Shinsegae, which runs the top-ranked E-Mart chain.
The country is Tesco’s second most profitable market after Britain, and this expansion might be seen as a sign that Tesco has faith in the strength of the South Korean economy.
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