While South Korea boasts a highly developed economy and world-class technology sector, J O Hambro Capital Management (JOHCM) argues that its equity market continues to reflect core emerging-market dynamics. In its latest Emerging Markets Spotlight, the asset manager highlights persistent shortcomings in corporate governance, political risk, and a speculative retail investor base that drive volatility and undermine market depth.
“We feel that the Korean financial landscape has several components that reinforce the country’s position as an emerging market, despite its undoubted technological prowess,” says James Syme, Senior Fund Manager for the JOHCM Global Emerging Markets Opportunities strategy.
Although the market can deliver periods of strong performance, these are often fueled by speculative retail activity, masking fragility in underlying fundamentals, the insight argues. Consequently, the asset manager maintains a cautious outlook on South Korea equity.
Read the full insight here.
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