South Korea is planning to close the “Korea discount”, says Joori Roh for Reuters. Companies in Asia’s fourth-biggest economy have lower valuations than comparable businesses in other markets because of “low dividend payouts” and the “dominance of opaque conglomerates known as chaebols”.
Foreign investors have long complained about onerous administrative requirements to trade in Seoul and a lack of corporate information in English. South Korean firms also “confirm dividend amounts weeks after the so-called ex-date” (the day a stock starts trading without the value of its next dividend), making it difficult for income investors to calculate their returns.
South Korea is still classified as an emerging market by index provider MSCI. Indeed, its stocks account for 11.5% of the MSCI Emerging Markets index, much to the chagrin of the country’s politicians. In June MSCI again declined to upgrade Seoul to developed-market status, says Dave Sebastian in The Wall Street Journal. Poor accessibility for global investors and tight curbs on short-selling are hampering the market. Seoul has taken steps to liberalise its currency market, but it will need to do much more to secure an upgrade by MSCI. That could trigger $44bn in foreign inflows into local stocks, says Goldman Sachs.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Local assets could do with a lift. The Kospi stock index is down 20% this year, while the won is at a 13-year low against the US dollar. The won’s fall has been driven by a trade deficit that reached a record high in August, says Sam Kim on Bloomberg. Higher energy and commodity prices have swollen the import bill, while semiconductor shipments fell 7.8% last month. Car-makers also face new “headwinds” as Washington offers generous subsidies to US electric-vehicle firms.
Bitcoin hits new heights - is now a good time to invest?
The value of Bitcoin has surged to a 20-month high. Why is Bitcoin rising and is now a good time to invest?
By Vaishali Varu Published
Gold hits record high - could it soar higher next year?
The yellow metal has hit a new all-time high. We look at market expectations for 2024, whether investors should sell and take profits, and how to invest in gold.
By Ruth Emery Published
The highest yielding S&P 500 Dividend Aristocrats
Tips Dividends are a key component of investment returns in the long-term. A portfolio of dividend aristocrats is a great way to build wealth and a sustainable income stream.
By Jacob Wolinsky Published
2023 will be a bumper year for stocks. Here’s how to play the rally
Tips Dominic Frisby explains why he thinks the market rally could have further to run in 2023 despite macroeconomic headwinds
By Dominic Frisby Published
China’s post-covid investment boom off to a slow start. Should you still invest in China?
Advice Investors are no longer bullish on the China shop but the gloomy consensus on Beijing’s economy might be unfair. Should you invest in China?
By Kalpana Fitzpatrick Last updated
UK stock market opening times: when will the stock market close for Christmas?
News Here is everything you need to know about UK stock market opening times during the Christmas period of 2023.
By Rupert Hargreaves Last updated
Stock market crash? This time it’s (slightly) different
Opinion The bears expecting a stock market crash have got it wrong, says Max King.
By Max King Published
3 UK shares to buy yielding up to 17%
Tips 3 UK shares top stocks to buy now, according to Alex Harvey of Momentum Global Investment Management.
By Rupert Hargreaves Published
Invest in Brazil as the country gets set for growth
Cover Story It’s time to invest in Brazil as the economic powerhouse looks set to profit from the two key trends of the next 20 years: the global energy transition and population growth, says James McKeigue.
By James McKeigue Published
Shining a light on India
Advertisement Feature Despite some short-term challenges, India remains very attractive for investors. Here’s why.
By moneyweek Published