The South Korean ETF (EWY) and market has essentially gone sideways following strong returns in 2003, 2004 and 2005. Today the market is again one of the cheapest in the region, with a strong currency, reasonable earnings growth and strong economic ties with China not to mention solid 4-5% GDP growth. But a more bureaucratic and pie slicing government has put off investors – especially foreign investors. The business community is eagerly awaiting the upcoming presidential election in December and a new president a year from now.
The Matthews fund family gives its perspective on where South Korea has come from and where it is headed and asks why it is still considered an emerging market. The South Korean KOSPI index was up 1.3% this week but is down 1% so far in 2007.
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