South Korea is in a good position to boost exports to emerging and developed markets in 2012, according to Baring Asset Management.
Roberto Lampl, head of emerging market equities at Barings, is bullish on the Korean won. “The currency is one of the most attractive emerging market currencies,” he announced.
Moreover, the Korean market is still one of the cheapest in the region, with further earnings downgrades already priced in. However, the whole analysis is based on continued global growth: “Companies whose earnings depend largely on global demand make up a very large proportion of the Korean stock market, while the strength of the Japanese yen is giving Korean exports a competitive advantage over their Japanese equivalents,” Lee says.
Hyung Jin Lee, manager of the Baring Korea Trust, believes that the country, with its small size and large global brands, is in a similar position to that of Japan in the 1980s.
“For example, in the car industry we have seen Hyundai gain on Toyota in terms of brand and market share,” Lee says. “The same can be said of Samsung in the smartphone and other sectors.”
Lee also points out that Korean overseas constructors are receiving a large amount of interest from the Middle East in particular.
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