On Growth, Exports and Supply Chain Diversification: Making the Case for South Korean Equities (Franklin Templeton)

Our lists: South Korea ADRs, South Korea ETFs and South Korea Closed-End Funds.

• South Korea’s market has seen sizable foreign outflows over the past year and a half, as it is very exposed to global market dynamics. The country’s exports are often thought to be a forward-looking indicator of the global economy. As such, we expect the equity market to recover as global market dynamics improve. From a bottom-up perspective, we think there is significant scope for stock picking in export-orientated structural growth opportunities.
• The market has suffered from a phenomenon called the “Korea discount,” where valuations of listed companies in South Korea lag that of their peers. In our view, the reason for the lag is tied to corporate governance and capital allocation. READ MORE

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