S.Korea's retail sector plunges as minimum wage hike disappoints business

BGF Retail

16/07/2018 01:54

** Shares of South Korea's retail sector drop after the
country's Minimum Wage Commission said it would raise minimum
wages by 10.9 pct for 2019  urn:newsml:reuters.com:*:nL4N1UA05X
    ** The minimum wage for 2019 is 8,350 won ($7.40) an hour,
which is lower than what workers had proposed
    ** After a 19-hour-long meeting, the wage commission agreed
on the hike, which was smaller than this year's 16.4 percent
rise, amid worries about weak job growth
    ** South Korea added a monthly average of 142,000 jobs
between January and June this year, the slowest growth seen
since the 2008-09 global financial crisis, according to
Statistics Korea
    ** South Korea's labour-friendly President Moon Jae-in has
pledged to raise the minimum wage by 55 pct to 10,000 won per
hour by 2020 as part of efforts to boost consumption and growth
    ** Shares of GS Retail Co Ltd  007070.KS  and BGF Retail Co
Ltd  282330.KS  plunge up to 10.8 pct and 11.1 pct, respectively
    ** Minimum wage hike decision is likely to be a burden
regardless of the industry's slight recovery in Q2 as convenient
store shares are the most sensitive channel in distribution
sector, says Yu Jung-hyun, analyst, Daishin Securities
    ** Sub-index for wholesale and retail  .KS45  falls up to
0.7 pct
    ** Broader market  .KS11  remains steady, as of 0027 GMT
    
    ($1=1,128.30 won)