Thursday, August 19, 2010

Investing In South Korea: The Hidden Asian Gem


We have all witnessed the enormous coverage given to China’s meteoric rise and the country has been attracting more investors than any other region in Asia as a result but for investors not willing to walk the monkey see monkey do china way, South Korea deserves equal attention than China if not more, offering under-rated values and long-term economic stability. While the US economy was bleeding last year South Korea adopted numerous economic reforms in early 2009, amid the global financial crisis; including greater openness to foreign investment and imports and has witnessed a remarkable change in its fortunes compared to last year. South Korea’s central bank has painted a bright optimistic future for the country as well anticipating exports to grow by 11.9%, private spending to jump by 4%, capital investment to soar by 13.4% and inflation to be a mere 2.6% for the year.

  • International Monetary Fund increased its 2010 growth forecast for South Korea to 5.75 percent from 4.5 percent as a result of the recovery in global trade and a successful Korean government led stimulus
  • South Korea has a strong economic partnership with China, which has strengthened enormously over the last decade. China now accounts for about 25 percent of South Korea’s exports, up from 14.6 percent in 2002. Korean companies are big now suppliers of equipment and materials needed for China's economic extravaganza.
  • South Korea’s annual per capita income of about $20,000 is at market prices only $5,000 behind that of Japan and it is catching up fast.
  • South Korea is the world's most wired nation - 95% of homes have broadband, compared with 58% in Germany. The country is also home to one-fifth of global lithium battery production

Investing Options in South Korea

South Korean Companies Listed On NYSE As ADRs

Samsung (SSNLF.PK): Samsung, which recently overtook Hewlett-Packard to become the biggest electronics company by sales in the world, is this year on track to make more money than the top 15 Japanese electronics companies combined.

Hyundai (HYMLF.PK) : the world's fastest-growing auto-manufacturer, it has increased US market share from 3.7 per cent to 4.4 per cent in just 12 months.

LG (LGERF.PK): LG Electronics Inc.

Korea Electric Power Corp. (KEP): generates, and sells, electricity throughout South Korea.

KT Corp. (KTC): provides telephone, and broadband Internet services.

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