South Korea's trade may have worsened in September

Exports may have dropped 6.7%.

South Korea is scheduled to release September trade data on 1 October and Standard Chartered is forecasting exports to have likely dropped 6.7% y/y due to fewer working days in the month versus last year.

The research firm also said that a backlog due to the court receivership, a form of bankruptcy where the firm cedes control to a group designated by the court, of a major shipping company contributes to the dim outlook.

"We estimate that exports dropped in the first 20 days of September by 17% y/y, but increased 2.9% (factoring in fewer working days due to the long Chuseok holidays)," it said in a report.

SC also said that the negative impact of the court receivership is limited over the first 20 days, but this problem will likely impact export growth through September.

"We expect September imports to drop 5.7% – much less than the 12-month average decline of 14.1% – as the oil price difference narrows. We believe the trade surplus remains strong in September, at USD 7.9bn," it added.