This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Asia-Pacific’s Week Ahead (Mar 2-6): COVID-19 Is No Parasite at South Korea’s Box Office

By:

Senior Market Analyst at Interactive Brokers

As some of South Korea’s communities face quarantine from the threat of COVID-19, theater chains across the country have generally seen fewer moviegoers lined up at the box office.

To date, more than 1,250 confirmed cases of COVID-19, the deadly new coronavirus that emanated from China, have been identified within the borders of South Korea, according to the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University.

south korea box office receipts plunge YTD 2020

The figure, which represents the largest group of individuals infected with the potentially fatal respiratory illness outside of Mainland China, appears to be growing rapidly – up from a little over 30 over the past week or two. There have also been around 12 deaths associated with COVID-19 within the nation.

The escalating danger posed by the virus in South Korea has also prompted the U.S. Centers for Disease Control and Prevention (CDC) to warn travelers that they should “avoid all nonessential travel” to the country, amid “limited access to adequate medical care in affected areas.”

The dire picture of South Korea’s battle with COVID-19 – from local quarantines to maximum virus-threat levels – has certainly hampered the nation’s ability to conduct critical global commerce, as well as carry on with domestic consumer spending.

While the country has been widely touted as the center of the semiconductor universe, with companies such as Samsung Electronics (KRX: 005930) and SK Hynix (KRX: 000660) fueling global advancements in consumer technologies, the country also appears to be facing a downturn in certain discretionary spending within its own domestic economy.

SOXX follows KOSPI lower

Recent attendance at its movie houses, for example, seems to have significantly dwindled — despite the country’s historic Best Picture win at the 2020 Academy Awards for Parasite.

In fact, box office receipts across the country have plunged by around US$52bn to date in 2020 compared to the same year-ago period, as evidenced by Box Office Mojo, amid prolonged fears about COVID-19 contagion.

Meanwhile, the lackluster performance is likely to provide a further sting to CJ Corp-owned CJ CGV (KRX: 079160), the country’s largest movie theater complex, which has already seen its third-quarter of 2019 revenue and operating profits fall 6% and 32% year-on-year to KRW 1,258bn and KRW 66bn, respectively.

CJ CGV under performs AMC

Against this landscape, investors will likely be weighing the impact from fears about the spread of the virus on South Korean (and global) economic growth, as well as the outlook for the chipmaking and traditional filmed entertainment industries, as the country releases its final fourth quarter of 2019 GDP results and gauge on inflation for February.

Monday, March 2

  • GDP (F-Q4’19)
  • Consumer Price Index (Feb)

In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of U.S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.

IBKR Bond Scanner
Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Author Security Holding: No Positions

The author does not hold any positions in the financial instruments referenced in the materials provided.

trading top