The 'Korea discount': Value stock or value trap?
Publishing timestamp: 2023-11-28 03:57:58
Summary
The article discusses the "Korea discount" phenomenon in South Korea's stock market, where stocks are undervalued compared to their global peers. The reasons for this include geopolitical risks, corporate governance issues, limited foreign investor participation, and complex corporate structures of chaebols (large family-owned conglomerates). While the undervaluation may seem like an opportunity for investors, there is a risk of falling or stagnant stock prices. The article suggests that South Korean equities could be attractive for long-term investors if the country continues its proposed reforms and improves accessibility for global investors. The inclusion of South Korea in the MSCI World Index could also be a positive factor. The article advises investors to look for small- and mid-cap companies that are less influenced by family ownership and have a more friendly shareholder return policy.
Sentiment: NEUTRAL
Tickers: .KS11,
Keywords: markets, kospi index, investment strategy, breaking news: investing, business news,
Source: https://www.cnbc.com/2023/11/28/the-korea-discount-value-stock-or-value-trap.html